PRESS RELEASE: We need an employment bill now - TUC, Zero Hours Justice and Living Wage Foundation call for workers’ rights boost in letter to PM
Without workers’ rights legislation, there will be no effective vehicle for delivering necessary reforms in the workplace, letter warns
TUC general secretary Frances O’Grady, Zero Hours Justice founder and business leader Julian Richer and Living Wage Foundation director Katherine Chapman have today (Thursday) written to the prime minister to call for the government to deliver the employment bill in May’s Queen’s Speech.
The call comes after reports that the government has now shelved the employment bill, more than two years since the legislation was first promised in December 2019, and following multiple commitments to the bill from ministers.
Delivering a boost to workers’ rights “was an urgent task in 2019, when a bill was first announced, and “is even more so today” given the impact of the pandemic, the letter states.
The letter warns that “failing to bring forward an employment bill would leave the government without an effective vehicle to make the necessary reforms to the workplace”.
In particular, the signatories demand action on the zero-hour contracts when used abusively.
The TUC says insecure work has become “endemic” in the UK. The union body estimates that one in nine workers – or 3.6 million people – are in insecure work. This includes more than one million on zero-hours contracts, the great majority of them against their will.
The Living Wage Foundation also found that a third (32%) of workers are given less than a week’s notice of their shifts.
The letter concludes that “businesses do best when they treat their workers well”, but says this cannot be achieved without an employment bill – urging the government to reconsider its plans.
TUC General Secretary Frances O’Grady said:
Time and time again, the prime minister said he would boost workers’ rights.
Julian Richer, founder of the Zero Hours Justice campaign, said:
In my lifetime’s experience of businesses, both large and small, I have found a well-treated workforce is crucial to their success.”
Director of the Living Wage Foundation, Katherine Chapman, said:
We know low pay is affecting millions during this cost-of-living crisis, but the other side of this coin is insecure work. Million more workers and families are struggling to make ends meet due to a lack of hours, with many faced with uncertain shift patterns provided at short notice. This makes it impossible for people to plan their lives, and often comes with additional costs.
The government has given repeated assurances that it would legislate new workplace protections:
Notes to editors:
Letter in full:
Dear Prime Minister,
We are writing to you as leaders of organisations with a range of perspectives on the world of work to urge you to include an employment bill in the forthcoming Queen’s Speech.
Your government came to office with a promise to “protect and enhance” workers’ rights and a manifesto pledge to bring forward “measures that protect those in low-paid work and the gig economy”.
This was an urgent task in 2019, when a bill was first announced, and is even more so today given the impact of the coronavirus pandemic on workers, particularly those in insecure forms of work, and on employers.
Failing to bring forward an employment bill would leave the government without an effective vehicle to make the necessary reforms to the workplace. Many workers would remain in vulnerable working arrangements. Good businesses would be undercut by those prepared to treat workers poorly. And everyone would be left uncertain about progress of government plans in areas from making flexible working the default to the establishment of a single enforcement body.
We are particularly concerned about uses of zero-hours contracts in ways that are abusive.”. For example, the Living Wage Foundation recently found that a third (32%) of workers are given less than a week’s notice of their shifts. This rises to half of those on low wages.
Collective agreements between unions and employers, the Zero Hours Justice’s campaign and the Living Hours accreditation programme all have an important role to play in stopping the abusive use of zero-hours contracts. But these need to be underpinned by robust laws that protect the most vulnerable workers by setting a baseline of standards.
There remains a strong consensus for reform, reflected in the Low Pay Commission’s proposals on notice periods for shifts and compensation for cancelled shifts. We encourage you to reassess these.
The Conservative Party manifesto promised to “make the UK the best place in the world to work”. We are strongly of the view that businesses do best when they treat their workers well. This cannot be achieved without the inclusion of an employment bill in the Queen’s Speech. We urge you to reconsider your plans.
Frances O’Grady, TUC general secretary
Katherine Chapman, director of the Living Wage Foundation
Julian Richer, Zero Hours Justice founder
By Pravin Jeyaraj
It is commonly known that the main problem with zero hours contracts is that workers do not know whther they have work from one day or one week to the next.
This level of insecurity can result in a great deal of anxiety as people on zero hours contracts, who are often on low incomes too, do not know whether they will be able afford to pay the bills each month.
However, one issue that gets significantly less attention is the notice period required to terminate a zero hours contract.
The default legal position is that there is no notice period to terminate a zero hours contract. If worker wants to leave straightaway, they can. Similarly, if an employer runs out of work, they can let go zero hours workers straightaway,
However, Zero Hours Justice have received numerous enquiries from people who are on contracts that are quite clearly zero hours contracts - no obligation for employer to offer work, no obligation for worker to accept work - but still include a contractual notice period of anywhere from a week to a month.
On the one hand, we've heard from zero hours workers who want to leave straightaway or within a week, but are told by their employer that they have serve a month's notice, as per the contract.
On the other hand, we have also heard from zero hours workers who have a contractual notice period of a a month, but whose contracts are terminated with less than a week's notice. The employer relies upon the zero hours nature of the contract and ignores the provisions about notice periods, thereby preventing the worker earning income from shifts that had already been agreed.
The irony is that workers are still free to turn down work when it is offered and employers have no obligation to offer work, thus rendering a contractual notice period somewhat redundant.
It seems that a lot of employers are trying to have their cake and eat it. They want the "flexibility" of a zero hours contract, if it benefits them, but they are not willing to grant the same flexibility to the worker.
By Pravin Jeyaraj
According to new research from the Living Wage Foundation, 32% of workers in full- or part-time employment receive less than a week's notice of any shifts. This rises to 50% for workers earning below the Living Wage.
The study, which looked at sample of 2,036 working adults interviewed on 14-15th December 2021, found 57% of UK workers were in jobs involving variable hours or shift work and, of that, 55% said that they were given less than a week's notice of shifts.
Even worse, 14% of this group said they did not even receive 24 hours' notice.
In addition to not knowing whether one would have work from day to day or from week to week, more than a fifth (21%) have had shifts cancelled at short notice, with the vast majority (88%) not being compensated at their normal rate. So, even if they are given the impression that will have work, it could still be taken away from them.
As well as loss of pay, not having enough notice before shifts or shift cancellation was found to result in a an "insecurity premimum":
At the end of the day, being on the National Minimum Wage or the Real Living Wage does not really help if you don't know whether or not you will have the work to get paid.
Zero Hours Justice welcomes all attempts to improve the security of work including the Living Wage Foundation's "Living Hours" accreditation: the right to four weeks notice before shifts; guaranteed payment for shifts cancelled within this period; the right to a contract reflecting actual hours worked; and a guaranteed minimum of 16 hours a week.
We would prefer that employers stopped using zero hours contracts and other forms of insecure work. But if they really need to use zero hours contracts, our minimum criteria - backed by both the TUC and the CBI - is less onerous than the Living Hours scheme:
The number of people on zero hours contracts once again broken through the one million barrier, according to the latest data from the Office for National Statistics.
The data shows that, during the period October to December 2021, 1,030,000 people reported that they were employed on zero hours contracts. This is equivalent to 3.2% of the people in employment.
The last time that the number of people on zero hours contracts exceeed one million was for the period April to June 2020, during the first quarter of the pandemic. At that time, the number of reported zero hours contracts was 1,076,000. After that, the number of people on zero hours contracts fell to as low as 879,000 during the third national lockdown (January to March 2021), before rising again.
Just as the UK employment rate continues to rise, it is quite clear that Covid only provided a temporary blip in the rise in the use of zero hours contracts.
While the number of zero hours contracts has reached its second highest level since records began, the ONS data also shows that the the proportion of people employed on zero hours contracts who say they are working full-time hours has fallen to its lowest level of 30.5%. Conversely, the proportion of zero hours workers who say they are working part-time hours has increased to its highest level of 69.1%.
Unfortunately, the decrease in the number of people on zero hours contracts working full-time hours since the first quarter of 2020 has not been reflected in an equivalent increase in the number of people not employed on zero hours contracts and working full-time.
At the same time, while the number of people on zero hours contracts working part-time hours has increased to its highest levels, the humber of people not on zero hours contracts who are working part-time hours has actually fallen.
These figures suggest that, while the amount of work available to staff on zero hours contracts is decreasing, employers are still offering regular work to zero hours workers without the benefits of permanent employment.
By Pravin Jeyaraj
Zero Hours Justice welcomes the decision by London-based Southwark Council to stop using zero hours contracts for its care home staff.
Under its new Residential Care Charter, the council has committed to no longer put staff on zero hours contracts in place of permanent contracts, unless individual members of staff specifically ask for it.
According to the latest data from the Office of National Statistics, almost a fifth of people employed on zero hours contracts are in the health and social care sector. The data also shows that more than a third (33.7%) of those on zero hours contracts describe themselves as working full-time and, for those who say they are working part-time, the average usual weekly hours is 25.5. This suggests that many employers are using zero hours contracts when the work is fairly regular and could be said to be de facto permanent.
In addition to the ban on zero hours contracts, Southwak Council will also pay care home staff at least the London Living Wage (£11.05 per hour), pay them for a proper handover between shifts and provide free training that must be taken during working hours.
By Pravin Jeyaraj
rThe UK employment rate may be rising, although it has not quite reached pre-pandemic levels, but official figures masks a disturbing reality. According to a study by the Resolution Foundation, young people aged 18-34 whose work was interrupted between February 2020 and summer 2021 ("returners") were more likely to in insecure work, compared to those who were able to continue working during this time.
In a survey of 6,100 adults, it was found that 33% of young returners were in atypical work (temporary contract, zero hours contract, agency work or variable hours contracts), compared to 12% of those who stayed in work during the pandemic.
On top of that, it was also found that 25% of returners were looking for a new job and 9% were looking for an additional job, compared to 19% and 5% of those who could stay in work during the pandemic, suggesting that those who have returned to work are slight less satisfied with their current working conditions.
The pandemic also had an impact on how young people felt about working in their sector. A third of young people working in highly affected sectors, such as hospitality, before the pandemic, had changed sectors between February 2020 and October 2021. Only 14 of those working sectors that were less affected by the pandemic decided to switch. Of those who moved out of a highly-affected sector, 30% moved to a different sector and just 3% moved to highly-affected sector.
It's incredibly worrying that a lot of young people who were unable to work during the pandemic, through no fault of their own, are finding it difficult to find secure work. This will have had an impact on their earnings and could worsen both the cost of living crisis and their ability to plan for the future. It is also clear, from the study, that young people do not want to have insecure work and taking the opportunity to switch to sectors that can offer more secure work.
By Pravin Jeyaraj
Almost half of workers on zero hours contracts could end up losing their jobs by 2040 as a result of automation, according to research by Forrester.
According to the the consultancy's Future of Jobs forecast, insecure workers, including those on zero hours contracts in the UK, will be among those most affected by the loss of the 34% of jobs in France, Germany, Italy, Spain and the UK.
The sectors that will be most affected by automation are expected to be the wholesale, retail, transport, accommodation, food services, and leisure and hospitality. According to the Office for National Statistice, these sectors currently account for just under 50% of workers on zero hours contracts (495,000).
By Pravin Jeyaran
The various restrictions imposed by the Goverment during the pandemic, whilst arguably essential, have also had an adverse impact on many people.
One group that hase been affected by lockdown and social distancing measures have been workers on zero hours contracts, particularly those within the hospitality, retail and leisure sectors. With non-essential businesses being required to close during lockdown - or later open up under certain conditions - many zero hours workers saw their work, and hence pay, disappear or significantly reduced
According to research by the TUC, 40% of workers in insecure roles saw their living conditions worsen during the pandemic, compared to 27% of those in secure roles. Nearly three quarters of workers on zero hours contracts reported losing out on shifts or hours.
There are many criticisms that have been levelled at the Government over their handling of the pandemic. But one good thing that was done was the launch of the Coronavirus Job Retention Scheme (CJRS), which enabled employers who had to close to continue to pay staff who were unable to work. The scheme was arguably a lifesaver for many workers on zero hours contracts. It is unfortunate, however, that not all employers chose to make use of the scheme to pay their zero hours workers.
The CJRS certainly seems like a model that could used for future pandemics, if not a permanent support mechanism for precarious workers.
Yet when Boris Johnson announced its Plan B in response to the spread of the Omicron variant, including asking people to work from home as much as possible, one knock-on effect was that people started to impose on themselves a "voluntary lockdown". This resulted in hospitality businesses and retailers seeing a fall in business and cancellations in the run-up to Christmas - usually one of the busiest times of the year - and hence a fall in the amount of work for staff on zero hours contracts. Without a furlough scheme, many of these employers would have been unable to support zero hours staff who may have been working for them for some time.
It didn't help that the Government did not exactly challenge rumours that an official lockdown would be announced straight after Christmas - a lockdown that, in the end, did not happen.
Charlotte Gill, Deputy Edity of Conservative Home, put it succintly: "Whatever the case, the combination of lockdowns, and de facto lockdowns, with zero-hour contracts, is not a successful one, and the Government should show more awareness of this – especially one that wants to “level up” the country. People can feel “left behind” when the working-from-home elite shows no consideration for industries that don’t have this advantage. It is yet another example of how the pandemic has affected members of the public differently. Too often our political class, and the media, forgets that every cry for more restrictions leaves a huge dent in someone else’s trade.
"Given that it is January – when activity, particularly in hospitality, tends to be at a low point – one imagines that insecure employment may be even more of an issue than it was when Johnson spoke of Plan B. Add to this the cost of living crisis, and we are no way (economically) out of the woods yet. Either way, the Government must not lose sight of this part of the electorate."
By Laurie Driver
Zero hours contracts have been around for almost 200 years. Its proponets argue that it is a necessary working arrangement that helps employers adjust staffing levels to fluctuating or hard to predict demand. It would be reasonable to describe them as a necessary part of the economy. In recent years though they have come to greater prominence in the news as their inherently exploitative nature was exposed to the public. Necessary changes did follow - it is now illegal for an employer of zero hours staff to prevent those staff taking additional work elsewhere.
Minimum hours contracts are a very slight improvement on zero hours contracts, but only barely. Under such contracts, the worker is guaranteed a minimum number of hours each week, but this is often something paltry like four hours a week. Hardly enough to live on and there is still the uncertainty as to how much work one will have. In a sense, a zero hours contract is a special form of minimum hours contract, the minimum being zero.
When you don't know how much work you will have one week to the next, it is difficult to budget accordingly and plan your finances. Statutory sick pay (SSP) only kicks in if you earn on average at least £120 a week, so there is greater pressure on zero hours workers to go into work while sick. And, even if a zero hours worker is eligible for SSP, it is only around £95 a week - they are likely to earn more by going into work; when work cannot be guaranteed, every penny matters. Indeed, in a study for the Trade Union Congress, it was found that the insecure work was major contributor in the spread of Covid 19.
Of course, all workers on zero hours contracts are entitled to the National Minimum Wage (NMA), currently set at £8.91 per hour for those aged 23 and over and due to go up to £9.50 per hour from April 2022. But you don’t need to be an economist to see that a minimum hourly wage does not really solve the problem of not knowing how much work you will have from week to week, especially if some weeks are lower than usual.
According to the latest figures from the Office for National Statistics, almost a quarter of all workers on zero hours contracts said they were underemployed, compared to 6.5% of people who were not on zero hours contracts. There is always the benefits system to top up any shortfall of pay but it is simply not designed to for a working pattern where hours can vary from a little as 3 hours to as many as 48 hours from week to week. This further compounds the income insecurity these workers experience, making budgeting for day to day needs almost impossible.
It's not enough to simply leave it up to zero hours workers to "get more hours" or a second job. If an employee could dictate how many hours they worked each week, they wouldn’t need government support. The exploitative nature of these contracts is that all the control lies with the employer, leaving the employee feeling like Oliver Twist, asking for more please. A second job may be feasible in some cases. But the nature of zero hours contracts is that shifts can be cancelled without notice and without pay. How can someone possibly commit to additional hours with a second employer if they don’t know what days or hours they will work for their first employer? On top of that, there may be difficulties in arranging care for children or elderly or ill relatives.
There is a better way, however. It isn’t perfect, but it may address some of the exploitative aspects of zero hours contracts, while keeping the flexibility employers need to keep their businesses viable, especially in these uncertain times.
I am calling for an Annualised Minimum Wage. This would be a guaranteed earned income over the course of the year and in conjunction with the prevailing minimum hourly wage. Initially, I’d suggest it be set at the level of the income tax threshold, currently £12,570, but I’m sure clever people may suggest a different threshold in time. This would be achieved by annualising both pay and hours. For example, presuming the worker is paid weekly, they would receive £241.73 per week gross, regardless of hours worked that week. (If they are usually paid monthly, that would amount to £1,047.50 a month.) The employer would have the choice to provide no work at all, or the legal maximum of 48 hrs (subject to opt out). Over the course of the year it would be the employer’s responsibility to ensure they provided sufficient work to match the income being provided. As an extreme example, this would mean an employer could stand their staff down for 22 weeks a year when work is quiet, then bring them back for a 48 hr week for the remaining 30 weeks. I would envisage that for most businesses a happy medium could be found between this example and simply putting the employee on a 27 hr week. It would seem logical to me that this model learn from the road haulage industry, where drivers’ hours are capped both on a weekly basis, but also as an average, with this average being calculated over either a 17 or 26 week period. This would offer the employer some quite reasonable protection from unscrupulous employees.
Agreement would need to be reached between the employee or worker, or employee representatives, and employers about how variable hours could be. The example I gave is quite extreme, but is perfectly feasible in the right industry. Furthermore, if agreement could be reached about what shifts could be asked of an employee and with what notice, this would genuinely open the prospect of a second job for those employees who would know what days and times they could commit to.
This arrangement offers many potential benefits to both employer and employee. As both pay and hours are annualised, it allows for a couple of days to be taken as “sick” or personal days, with no fluctuation in pay, as long as the hours are paid back within the terms of the contract. The employer is no longer paying an employee not to work and the employee doesn’t have to worry about whether they can afford to take a day or two off to get over a cold. Workers with young families may be able to agree to work the majority of their hours during term time, taking school holidays off, again with no loss of weekly pay. This could bring thousands of workers back into the workforce potentially. At a time when we need a larger pool of potential job candidates, this is one means of achieving this. Possibly the greatest benefit might be that it could actually make the Universal Credit system work by stabilising the pay of workers
Employers would benefit from greater employee loyalty, less staff turnover, as well as greater productivity because staff are feeling healthier and not having to worry, as much, about meeting their daily needs. For early adopters of such a scheme I imagine their vacancies would be highly prized. Some employers may argue they simply couldn’t afford an annualised minimum wage. I would counter, that at this threshold, on average, it almost matches what they’re paying anyway. Yes, overall, it is likely to cost the employer a little more in cash terms, but one has to put the various benefits against this cash outlay.
For society, the potential benefits are significant. An employee on £12,570 will generate almost £850 in National Insurance (NI) contributions (from April 2022). There are an estimated one million workers on zero hours contracts, that’s almost £1 billion for HMRC. Research suggests that almost four million employees don’t pay tax, plus 1.2 million self employed, so if they could all be brought into the tax threshold by a scheme such as this, it could raise a further £4.5bn annually from NI contributions alone.
Furthermore, improved employee welfare makes for better productivity, a conundrum governments of all colours have struggled with over the years. A stable income means less government support is needed to prop up low paid employment and fewer Department for Work and Pensions staff needed to calculate payments for incomes that previously fluctuated wildly. Giving all workers access to workplace auto enrolment pensions means they can do what they were designed to do and help employees provide for their old age, again reducing the burden of future tax payers. This is, potentially a win, win, win scenario.
This proposal isn’t perfect, it isn’t fully formed and the devil is always in the detail, but it takes from existing working models. Salaried staff are already paid an annualised income regardless of hours worked in any given week. Some employers are already offering annualised hours to hourly paid staff, so the leap to annualised pay is a small one
As you can see, I’m not calling for zero or minimum hours contracts to be scrapped, rather a slightly Frankenstein merging of the two, offering both employer and employee the best aspects of the respective contracts and society a potential solution to the zero hours enigma that has dogged them for so long.
Laurie Driver (not the author's real name) is a lorry driver working on a zero hours contract and can be contacted on Twitter @justsnoozing. This article does not represent the official view of Zero Hours Justice but is published for the purpose of inspiring solutions.
By Pravin Jeyaraj
The industry sectors with some of the worst compliance with National Minimum Wage (NMW) legislation are also the ones with relatively high numbers of staff on zero hours contracts.
The Department for Business, Energy and Industrial Strategy (BEIS) have released data on 208 employers who failed to comply with the law and pay staff the National Minimum Wage (NMW).
According to the data, of the 208 employers, 45 were in the hospitality sector, 36 were in the retail sector and 14 were in the domicilary care and childcare sector.
According to recent data from the Office for National Statistics, there are almost 1 million workers on zero hours contracts and 24.9% are in the accommodation and food sector, 11.6% are in the wholesale and retail sector and 19.4% are in health and social care.
The various employers named and shamed by BEIS range from multinational companies to sole traders and they breached national minimum wage legislation in a number of ways. Whilst not all breaches were intentional, the main reasons for employers' non-compliance were the practice of making workers pay for the cost of uniforms or complying with a dress code (37%) and unpaid working time such as mandatory training, trial shifts or travel time (29%). For workers earning the NMW, these practices effectively takes their pay below that level.
It was also found that 16% of the 209 employers did not pay the correct minimum wage rate to apprentices and 11% failed to increase NMW pay whenever the rate rose or paid the wrong rate.
Whilst zero hours workers are also entitled to receive at least the NMW, the types of deductions or errors that are made to reduce the NMW rate can exarcebate the financial insecurity faced by those who cannot rely on guaranteed hours of work.
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Images can be downloaded from here. Image of Julian Richer should be credited to Gerardo Jaconelli.