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‘Unfairly demonised’ zero hours contracts still misunderstood, says HR body

November 28, 2013  /   No Comments

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Debate about the use of zero hours contracts has reignited with the publication of a report which suggests the use of the controversial employment practice has been “underestimated, oversimplified and unfairly demonised”.

About one million people – 3.1% of the UK workforce – are employed on zero-hours contracts, according to a survey of 1,000 employers by the Chartered Institute of Personnel & Development (CIPD) for its report, Zero-hours contracts: myth and reality.

Zero-hours workers are “just as satisfied” with their job as the average UK employee, according to another survey within the report, of more than 2,500 workers. Such workers (65%) are also likely to be happier with their work-life balance than people on standard employment contracts (58%), and less likely to think they are treated unfairly by their organisation (27 %) than others (29%).

However, there are areas of poor practice identified by the CIPD. One in five zero-hours workers say they are sometimes (17%) or always (3%) penalised if they are not available at all.

Forty per cent say they receive no notice at all or find out at the beginning of an expected shift (6%) that work has been cancelled. Only 32% of employers make contractual provision or have a formal policy outlining their approach to arranging and cancelling work for zero-hours workers.

Pay is said to be lower too for employees on such contracts. Eleven per cent of employers report that their pay is lower than comparable permanent staff doing similar jobs.

Despite these areas of poor practice, the CIPD believes that bringing in legislation would have unintended consequences, arguing instead for improving management practice and enforcing existing regulation first.

“Employers that took part in the research told us that if restrictions were placed on employers’ use of zero-hours contracts, they would simply switch to another form of casual labour,” said Peter Cheese, CIPD chief executive. “Such an approach would also penalise the majority of zero-hours workers that choose these types of working arrangements because they suit their particular circumstances.”

The CIPD report includes a number of recommendations to improve practice in the use of zero-hours contracts, and a guide, produced with law firm Lewis Silkin.

The Trades Union Progress welcomed the guide, but still called for legislation on the contracts. “The real problems lie with bosses who aren’t interested in good practice and are more concerned with squeezing staff to boost their profit margins,” said general secretary Frances O’Grady.

“That’s why we need legislative action to stamp out the growing abuse of workers on zero hours contracts and other forms of insecure work.”

The Labour Party has pledged to outlaw the “exploitative use” of zero-hours contracts if it got into power.

But both the REC and the EEF, the manufacturers’ organisation said flexibility must be preserved for employers.

Commenting on the use of zero-hours contracts, Steve Radley, director of policy at EEF, the manufacturers’ organisation, said:

“The debate on zero-hours contracts has become unbalanced and needs greater focus on the benefits it can bring to both workers and employers,” said Steve Radley, director of policy at the EEF.

“With skills in scarce supply, zero-hours help employers to tap into specialist skills when they are needed and to draw on the experience of older workers. For many workers, zero-hours give them the flexibility and they allow older workers to taper the transition from work to retirement.”

Tom Hadley, director of policy at the REC, added: “Rather than seeking to add further layers of regulation and getting bogged down in a debate over different types of contracts, the focus for government must be to ensure that workers have the right skills and awareness to progress within the jobs market – whatever the type of contract they are on.”

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