4 September 2015

Are zero-hours contracts a small but useful part of a flexible labour market or are they are a stark reminder of Britain’s two-tier workforce?

The Institute of Directors (IoD) puts forward the first argument, pointing out that these contracts affect just 2.4% of the overall workforce, while offering both businesses and employees an important degree of flexibility.

The TUC highlights that they have increased by 19% (to 744,000) over the past year and that people employed on these contracts earn £300 a week less, on average, than workers in secure jobs.

They suit students and older people, the IoD counters, and these are the main users of such contracts as they cannot commit to a set number of hours each and every week.

If they are such a boon, TUC General Secretary Frances O’Grady argues, then ministers or business leaders should show how they would survive on a low-paid zero-hours contract job, "not knowing from one day to the next how much work they will have".

Down the middle of this argument comes the Chartered Institute of Personnel and Development (CIPD) with Labour Market Adviser Gerwyn Davies calling for balance and suggesting that, when managed well, these contracts can benefit both employers and workers.

The CIPD notes that, as a whole, 84% of UK workers say they are satisfied with their working hours (the EU average is 80%) while 77% report they are satisfied with their work–life balance (EU average 74%).

It recommends that employers should pay zero-hours workers travel expenses and at least one hour’s pay where work is cancelled at short notice. They should also conduct regular reviews on whether zero-hours contracts are appropriate for the nature of the work involved.