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1.4 Million Zero Hours Contracts- Official

Wednesday, April 30, 2014

Growing Recognition Of Exploitation In 1.4 Million Zero Hours Contracts Must Lead To Action To Tackle It Says GMB

There has to be an end of exclusivity clauses, minimum hours should be specified in contracts and workers should have the right to claim deemed contractual hours on the basis of their average hours over any 12 week period says GMB.

GMB commented on The provisional estimate from the ONS survey of 5,000 businesses indicates that in January to February 2014 there were around 1.4 million employee contracts that do not guarantee a minimum number of hours, which provided work in the survey reference period of the fortnight beginning 20 Jan 2014. See notes to editors for summary of ONS report. 

Paul Kenny GMB General Secretary said "The growing recognition of the extent of exploitation of workers on contracts that do not guarantee a minimum number of hours is welcome and must lead to action to tackle it.

What is yet not recognized is the extent to which people working on such contracts are blighted in terms of getting credit, entering into rental agreements etc.

There has to be an end of exclusivity clauses, minimum hours should be specified in contracts and workers should have the right to claim deemed contractual hours on the basis of their average hours over any 12 week period.

The reason we have seen a growth in these precarious forms of employment contracts is that those at the top getting more than their fair share of the income from employment..

The share of income from labour in the UK going to the top 1% of earners has nearly doubled from 7% in 1970 to 13% in 2011. Before the recession the top 1% of earners were raking in over 15% of all pay. This doubling of the share to the top 1% is leaving less money for the pay of the rest of the workforce.

The lesson from history is that Government has to use the tax system to deter employers paying excessive pay. If the marginal tax rate for earnings above £1m a year is raised to 80% there would be a dramatic drop in numbers getting paid that amount. That would leave more for the rest like those on zero hours.

This would help the economy will get back to pre-recession levels as we have a very long way to go to climb out of the hole caused by the recession. Given the increase in population GDP per head is still 5.8% below 2007 levels. This is the root cause of average earnings being down 13.8% in real terms since then.”

End

Contact: Kamaljeet Jandu on 07956 237178 or Martin Smith 07974 251 722 or Mick Rix 07971 268343 GMB press office 07921 289880

Notes to Editors

Summary of ONS report

1. Summary

There is no legal definition of “zero-hours contracts”. Consequently, different groups and bodies will not only measure the number of such contracts in different ways, they will also have different perceptions of what should be included as “zero-hours contracts”. Significantly, the perceptions of employers and employees on what constitutes a particular type of contract will differ. Also, estimates from both employers and employees may be influenced by their level of awareness of such contracts.

However, as Section 2 of the Government’s consultation on zero-hours contracts sets out: “In general terms, a zero-hours contract is an employment contract in which an employer does not guarantee the individual any work and the individual is not obliged to accept any work offered”. So although various bodies and surveys use slightly different definitions, there is the common factor of a lack of a guaranteed minimum number of hours of work.

In meeting its intention to produce an estimate of the number of “zero-hours contracts” from a business survey, ONS has concluded that the most useful definition to use is contracts that do not guarantee a minimum number of hours, rather than “zero-hours contracts” and that it should be designated in that way. This includes, but is not exclusively, “zero-hours contracts” and will include some other contract types that do not guarantee a minimum number of hours.

The provisional estimate from the ONS survey of 5,000 businesses indicates that in January to February 2014 there were around 1.4 million employee contracts that do not guarantee a minimum number of hours, which provided work in the survey reference period of the fortnight beginning 20 January 2014. This is the official ONS estimate based on a survey of businesses.

The most recent estimate, published on 19 February 2014, of the number of people who are employed on “zero-hours contracts” in their primary employment, from the Labour Force Survey (LFS) of individuals in households, is 583,000, for the period October to December 2013. This 30 April 2014Office for National Statistics | 2relates specifically to the individual’s perceptions of whether they are employed on the specific typeof contract – a “zero-hours contract”.

Estimates from employers are likely to be higher than those from individuals for a number of reasons. Employers may be more aware of formal contractual arrangements of their employees. In addition, one person can hold more than one contract and/or there may be people working on such a contract in addition to their primary employment and/or their working patterns may mean they do not consider themselves to be covered by such a contract. However, even if it were possible to take account of all these factors, it remains unlikely that the two estimates would be the same. This is because they are based on the perceptions of two different groups.

In comparing both figures, it must be noted that they are both ‘point-in-time’ estimates, and that whilst the LFS data exists for several years back, the business survey data is the first estimate of its type. It is not, therefore, possible to say from the business survey whether the number of employee contracts without a guaranteed minimum number of hours of work is increasing or decreasing.

Notes to editors

From the ONS survey of businesses, and in addition to those that provided work in the reference period, there are also employee contracts that do not guarantee a minimum number of hours, that did not provide work in the survey reference period of the fortnight beginning 20 January 2014.

These contracts are more difficult to analyse, as we do not currently have many more details about them. However, some evidence from qualitative analysis indicates that these include a mixture of:

people with contracts with several employers (who will be included in the headline estimate if they worked for one of those employers); agency staff; those not wanting to work; those who have found another job elsewhere but remain on employer records; some people on leave or sick; and those not offered work in the reference period. Overall, this will probably include some people that need to be added to the official 1.4 million estimate but this needs to be investigated in more detail, and

ONS will undertake further research in this area and report later in 2014. The initial estimate of the number of employee contracts that do not guarantee a minimum number of hours, that did not provide work in the survey reference period of the fortnight beginning 20 January 2014 is around 1.3 million.

Looking at the types of people employed on “zero-hours contracts”, the Labour Force Survey shows that they are more likely to be women, in full-time education or in young (16-24) or older (65 and over) age groups, perhaps reflecting a tendency to combine flexible working with education or working beyond state retirement age. Nearly two thirds of people employed on “zero-hours contracts” work part-time compared with around a quarter of people not employed on “zero-hours contracts”. On average, someone on a “zero-hours contract” usually works 25 hours a week compared with 37 hours a week for people not employed on “zero-hours contracts”. Just over a third of those employed on a “zero-hours contract” want more hours, with most wanting them in their current job. This is somewhat greater than for people not employed on a “zero-hours contract”.

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