Zero hours contracts – insecurity or flexibility?

Ian BrinkleyDirector, The Work Foundation

How many people on ZHCs?

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

0

100

200

300

400

500

600

700

People on ZHCs (individual responses) 1997-2014

1997 2011 2012 2013a 2014 2013b0

200

400

600

800

1000

1200

1400

1600

173 189250

583622

1400

People on ZHCs 1997-2014 and number of ZHC contracts where work was offered in the survey

week (2013b)

Permanent and average tenure of employment 1993-2014

Share of permanent jobs 1993-2014 (% all in work)Note: all figures April-June, seasonally adjusted. Total employees minus temporary employees as % of all in employment. Source: Office for National Statistics

1993 2008 2010 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

79.2%81.5% 80.3% 79.2%

Average time spent in a job 1993-2013 (years)Note: all figures annual average, time spent in current job with same employer. Source: OECD

1993 2008 20130

1

2

3

4

5

6

7

8

9

10

7.88.3

9

Workplace and workforce flexibility 2010-2014Notes: all figures share of total employment UK, seasonally unadjusted. Working at home is 2011 Q1 to 2014 Q1, zero hours is 2010 Q4 to 2014 Q2.Sources: Labour Force Survey, ONS and TWF estimates.

Workplace flexibility 2010Q4 2013Q4

Flexitime 11.0 10.5

Annualised contract 4.6 3.9

Term time working 5.3 4.7

Job sharing 0.7 0.6

Zero hours 0.6 2.0

On-call 2.2 2.0

4.5 week/9 day fortnight 1.0 0.9

None of above 75.3 75.9

Workforce flexibility 2010Q4 2014Q2

Part time employees 22.9 21.9

Temporary employees 5.3 5.4

Second jobs 3.8 3.9

Self-employed 13.7 15.0

Working at home (employees) 4.5 4.8

Why people take ZHCs and why some are satisfied

Reason for taking ZHC work IPSOS Mori Jan 2014 (N=464)

Could not get regular work; 28%

Main work in sector/occ; 13%

Family ; 24%

Fit with other jobs; 18%

Prefer variation; 17%

Why some people are satisfied with a ZHCNote: some other reason includes being a student (1%) , caring responsibilities (3%), health problem (3%). CIPD November 2013 (N=213)

Like flexibility; 44%

Retirement related; 27%

Don't

need to work; 11%

Good

pay

and

benefits; 7%

Some other

reason; 16%

Job quality and worker engagementSource: Zero Hours contracts: Myth and Reality CIPD November 2013 ( ZHC N= 456)

% agreeing All ZHCsWill work more than contracted hours 58% 49%

Highly motivated by core purpose of organisation 53% 61%

Right work-life balance 58% 65%

Positive relationship with colleagues 82% 80%

Job as challenging as it could be 63% 64%

Opportunities to grow and develop 45% 43%

Satisfied with content of job role 60% 65%

Senior managers treat staff with respect 43% 45%

Good relationship with line-manager 64% 59%

Likely to recommend organisation as an employer 54% 52%

Employer does not treat them fairly 29% 27%

Frequently under pressure (every day/1-2 times a week) 41% 29%

Likely could lose job in current economic climate (Nov 2013) 18% 18%

The public debate on zero hours contracts• Emerged in 2010, with most media coverage

negative;• Some see them as symbolic of everything wrong in

an increasingly insecure labour market;• Others see them as an essential part of a flexible

labour market without which unemployment will increase;

• Growing but not universal consensus - support for ban on “exclusivity” in ZHCs - recognition that legislation is a blunt instrument - recognition of important sectoral differences - seen as part of a bigger problem (eg low pay)

Potential policy responses to ZHCsProposals Pros ConsBan on exclusivity Justified on equity and flexibility

groundsMay be hard to make water-tightDon’t know if big problem for ZHCsOther contracts also have exclusivity clauses

Individual right to request conversion to regular employment of some ZHCs

Would discourage unjustified use of ZHCs

Less flexibility, more complexity and costReplaced by other forms of casual workMost exploited will not make request

Complete ban Reduction in one form of casual employment

As aboveMajor departure from UK policy and practiceWould reduce flexibility for individuals who want/ need these sort arrangements

Change in public procurement, esp social care

Many private sector employers would welcome changeMay reduce involuntary ZHC use

Higher costs for public funded social servicesCould reduce voluntary ZHC use

Collective bargaining Flexible and voluntary approach specific to sectors (eg NHS, Universities, food processing)

Coverage weak in many sectors with high use (hospitality, social care) or large numbers (retail)Little appetite to strengthen CB role in economy

Better knowledge of rightsCodes of practiceSectoral forums/codes

Reduce widespread ignorance of rights of ZHCs and spread best practiceOpportunity to convene groups of employers and others to look at ZHCs as part of wider employment practices

Little traction with worst cases and more general bad management practices Not clear who will develop national and sectoral codes or convene sectoral forums

Future trends• Despite “toxic” public image, few signs that many

employers will reduce use of ZHCs;• Public sector austerity means higher cost solutions

to end ZHCs in social care/NHS will not be fully funded;

• More pressure on employers from semi-legal/voluntary codes, collective agreements, better informed workforce, and public procurement to implement best practice;

• More people working beyond state retirement age and students combining work and study may increase “voluntary” demand;

• Return to “full employment” would increase more regular job opportunities and reduce involuntary ZHCs.