Zero-hour contracts: the stubborn hangover from the recession

Young Workers December 16 2015

The number of zero-hour contracts has increased 500% since the recession, with young workers bearing the brunt. Zero-hour-contracts are those with no guaranteed hours. This forces workers to live in the precarious position of not having a stable income, they might work 30 hours one week and two hours the week after.

Whereas other aspects of the job market have improved: for example graduate opportunities, pay, and unemployment, the Government’s latest statistics show that zero-hour contracts continue to rise, particularly for young people. They are one of the economic recovery’s lingering headaches, as is the working poverty trap. Over a third of zero-hours contract workers are aged 16-24. That’s over a quarter million young people. Put differently, that’s around the equivalent population of Newcastle, all not knowing what their pay check will be the next week: whether it will pay for the night out, what about the rent?

Some people will tell you that all the fuss about zero-hour contracts is just a lot of hot air: zero-hour contracts are flexible, they provide work-life balance, they’re good for students and carers, workers on zero-hour contracts are satisfied. Sound familiar? This is what Tory Minister Iain Duncan-Smith thinks. But what does a man who earns £134,565 a year and lives rent free in a £2 million house know about the reality of living off a zero-hour contract? Probably about as much as people living off a zero-hour contract know about living rent free in a £2 million house.

There is some truth to claims zero-hour contracts can be positive. They can be flexible, and they are attractive to some young people who juggle multiple responsibilities. I had a zero-hour contract and it worked perfectly for me, at the time.

So what are the problems? For a start workers on zero-hour contracts are paid less, a lot less. TUC research found that the average hourly wage for a worker on a zero-hours contract was £8.83 an hour – a third less than the average for staff on permanent contracts (£13.39). They also found that the majority of workers on zero-hours contracts outside London earned less than the living wage of £7.65 an hour, while more than three quarters of those working in the capital earned less than the London living wage of £8.80 an hour.

We’re not against all Zero-hour contracts, but they should be the exception, not the rule. They should be an option for workers, like those also in education, who want flexibility in their working hours. However when you have companies like Sports Direct, who have 75% of their workers on zero-hour contracts, there can be no doubt that these contracts are being used to undermine pay and conditions to make a quick profit. It’s the abuse that we are against.

Things are so bad Sports Direct workers in Unite the Union started a campaign against their shameful working practises. They also highlighted that workers faced penalties for chatting too much, sick leave, and even toilet breaks. This highlights that the problem is more than a contract type: it’s about the general disrespect companies’ show to workers, who are predominantly young and have limited options for employment.

Zero-hours contacts are the tip of the iceberg. There’s so many different types of poor quality contracts it’s hard to keep count. There’s bogus self-employment, short hour contracts, underemployment, contracts without sick pay, holiday pay, or pensions, insecure agency contracts. The list goes on and gets longer as companies find new ways to take advantage of workers.

The CWU’s Closing the loopholes campaign aims to tackle Pay Between Assignment contracts – another form of poor quality contracts. These contracts are as precarious as zero-hour contracts: they’re permanent but often only guarantee employees one hour of work a week. Our campaign has already helped hundreds of workers in getting more stable employment.

The continuing rise of zero-hour contracts and similar precarious forms of contracts is one of the reasons younger workers can be paid less for the same job, why they struggle with rent, let alone think about trying to get on the housing ladder.

What needs to be done? There needs to be the wider political pressure to make exploitative contracts a thing of the past. The CWU, Unite and other unions have been campaigning against zero-hour and other exploitative contracts, and we’ve all been working with the TUC for Decent Jobs Week. Poor quality employment isn’t going to be stopped overnight, but joining a trade union is a good start. Better still; persuade your mates to join one.

Compiled by:

Dan Durcan
CWU Research Department