The Committee's discussions look into the true impact of zero hours contracts on workers and their families, and possible alternatives to them.
The term “zero-hours contract” refers to an employment contract in which the employee is not guaranteed work, and is paid only for work carried out. Zero-hours workers can be ‘phoned in’ by the employer or even turn up to be told they are not needed that day, as their contract does not stipulate any contracted hours. This means an ultra-flexible workforce for employers, but also a very insecure and potentially uncommitted workforce.
Many popular and high street brand names now make use of zero-hours contracts on a large scale. The Committee heard that across the UK, 83,800 McDonalds staff; 20,000 Burger King staff; approximately 20k Sports Direct staff; 24,000 JD Wetherspoon staff, 4,000 Boots the chemist staff, 16,000 Spirit staff; 20,000 Dominos pizza staff; 200 Tate staff; 600 Subway sandwich staff and 3,600 Cineworld staff are all on such contracts.
USDAW have submitted evidence to the Committee which describes some of the damaging impact of zero-hours contracts. It says that today one in every four businesses employs at least some workers in this way.
Yet their evidence shows that many zero-hours contract workers are working broadly the same number of hours each week. This suggests that these contracts are convenient for employers but not a necessity for the business. The result for workers is insecurity and no guaranteed income. Pay packets can vary from one week to the next. They may also have problems accessing mortgages, loans and renting as it is difficult, if not impossible, to show a secure income. Workers on zero-hours contracts are not defined as 'employees' and as a result lose out on important employment rights.
The Committee has heard that companies are using “zero hours” contracts when there is not a justifiable business need, leading to unnecessary insecurity, lack of opportunity to access finance, mortgages or even rental housing, and loss of important employment rights.
Ian Davidson MP, Chair of the Committee, said:
“Businesses like Tesco, Morrisons and Sainsbury's do not use zero-hours contracts. Instead flexible contracts have been negotiated that provide workers with guaranteed hours but still deliver the flexibility to meet the demands of the business. If some of Britain's most successful businesses can respond to business fluctuations without resorting to zero-hours contracts then why can't others?
“This inquiry was sparked by compelling evidence given to the Committee by Unite the Union, who were keen to demonstrate the growing extent of the practice. Unite believes that in general zero-hours contracts are unfair, creating insecurity and exploitation for many ordinary people struggling to get by.
“We have heard some examples of terrible practice, with people being texted to come in to work in the morning only to be turned away when they get there, losing their travel costs and any other arrangements they had made. Obviously this would be an impossible situation for anyone with children or people to care for. It would also be difficult or impossible for people who are under-employed to seek other work, because of the need to be available for work that might not actually come, or being locked into one, exclusive zero-hours contract.
“Businesses say they need the flexibility to respond to changing demand, yet it seems that these contracts are in fact being used as a way of dodging giving people the security, employment benefits and rights that they deserve. It also allows them to unfairly undercut decent employers who pay the full costs of providing proper employment.”
The types of business using these contracts are remarkably widespread, from major leisure and service brands, to the social care sector, the Tate galleries and even Buckingham Palace. Businesses often cite the need for "flexibility" to respond to changing demand to justify these contracts. Yet evidence to the Committee shows that many employees on zero-hours actually do work the same number of hours every week, but cannot enjoy the benefits of pay security, employment contributions or employment rights.
Monday 10 March 2014, Douglas Community Centre
- Dave Watson, Scottish Organiser, UNISON Scotland
- Jake Malloy, Regional Organiser, National Union of Rail, Maritime and Transport Workers
- Rob Gowans, Policy Officer, Citizens Advice