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Zero Hours Exploitation Recognised

Friday, April 25, 2014

GMB Welcome Recognition Of The Extent Of Exploitation Of Workers On Zero Hours Contract By Labour Party Review

The proposals are a long way from where we need to get to but they are a starting block to get proposals that are fit for purpose says GMB.

GMB commented on Norman Pickavance’s review for the Labour Party on zero hours contracts. See notes to editors for summary of the recommendations.

Paul Kenny GMB General Secretary said "At long last there is a recognition of the extent of exploitation of workers on zero hours contracts and we welcome this. The proposals are a long way from where we need to get to but they are a starting block to get proposals that are fit for purpose.

Those at the top getting more than their fair share of the income from employment is the major reason for the growth in precarious forms of jobs like zero hours, bogus self-employment, agency and temporary work, very short hours part time jobs, flexible and casual 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.”


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

Norman Pickavance’s review for Labour Party on zero hours- Summary of recommendations:

1. Ensure that workers on zero-hours contracts are not obliged to be available over and above their contracted hours

· Employees on zero-hours contracts should have legal rights so they are not obliged to make themselves available without any guarantee of work.

2. Ensure that workers on zero-hours contracts are free to work for other employers

· There are many legitimate reasons why employers may wish to require workers to work exclusively for them – such as commercial sensitivity – but employers should not be able to require this without any guarantee of work.

3. Give workers on zero-hours contracts who are working regular hours a right to a contract with fixed minimum hours

· After 6 months, workers should have a right to request a contract that is other than zero hours and which provides a minimum amount of work.

· Employers would only be able to refuse this request if they are able to demonstrate that their business needs cannot be met by any other form of flexible contract – for example, seasonal work

· After a period of 12 months continuous employment, workers on zero-hours contracts who are working regular hours (e.g. a minimum of 8 hours a week) should be offered a fixed hours contract automatically. People working regular hours would only be able kept on a zero hour contract for more than a year if they formally opted-out of these arrangements.

· These rights should include bridging provisions to prevent unscrupulous employers from laying people off or ‘gaming’ the hours during the reference period to avoid complying.

4. Give zero-hours workers a right to compensation when shifts are cancelled at short notice

As suggested by the CBI, employees on zero-hours contracts should be entitled to compensation – 2-hours pay for example – when a shift is cancelled at short notice, as recommended by the CBI.

How long that notice period should be should be the subject of consultation – for example a minimum of 48 hours to a week’s notice of any changes in hours could be provided when hours are reduced.

5. End the confusion surrounding rights and responsibilities

· All workers should have clarity about their employment status and terms and conditions. This could be done by amending the Employment Rights Act 1996 so that employers are required to provide basic information about terms and conditions to all workers they engage (not just employees) within two months of their start date.

· A new Code of Practice would provide clarity for employers and employees about their rights and responsibilities. The content should be developed by trade unions and employer representatives through ACAS, as is standard practice. Provisions could include advice for employers operating zero-hours contracts on when the use of zero-hours contracts may or may not be appropriate and guidance in relation to difficult issues such as holiday pay, notification periods, pensions and auto-enrolment.

 Notes to Pickavance recommendations

1. Norman Pickavance, a former director of Human Resources at Morrisons was asked in September by Ed Miliband to lead an independent review into how to prevent the exploitative practices associated with zero hours contracts.  He has consulted a wide range of HR directors, employers, employees and their representatives in writing this report.

2 Official data from the ONS suggests 600,000 workers are on zero hours contracts – a three-fold increase since 2010 with an estimated 90,000 in Scotland. A Recent CIPD survey estimated one million workers could be on zero hours contracts. And some firms are heavily reliant on this form of employment. For instance, out of a total of 20,000 people employed by Sports Direct, no less than  17,000 are on zero hours contracts. 3.. Nearly half (46 per cent) of workers on a zero-hours contract say they receive little or no notice when scheduled work is no longer available;

3. Nearly two-thirds (60 per cent) of workers on zero-hours contracts say that they feel obliged to accept work if their employer asks, one in ten say they are never able to work for another employer, and a fifth  say that they are always or sometimes penalised for not accepting hours from their employer. One survey  found that 57 per cent of all workers on zero-hours contracts say that they find it difficult to budget from month-to-month.

4. There is widespread confusion about entitlements to maternity, sick and holiday pay. For example, the Scottish Affairs Committee reported a case where a worker on a zero-hours contract in the offshore industry survived a helicopter crash but, because he was injured and unavailable for work found himself without access to sick pay.


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