Danger that ‘insecurity at work becomes the norm,’ says Labour party
Workers on zero hours contracts are likely to earn £6 per hour less than other employees, according to figures released by the Labour party today.
The analysis, by the Resolution Foundation, found that staff on zero hours contracts earned an average of £9 per hour, compared to £15 per hour for other workers.
The Labour party said that it was worried about the “abuse” of such working practices, and concerned about the 40 per cent difference in pay levels uncovered by today’s statistics.
However, observers noted that zero hours contracts were known to be more prevalent in the hospitality, entertainment and retail sectors, where the market rate for many roles was at the lower end of the pay spectrum. By comparison, the national minimum wage is £6.31 for those aged 21 and over.
Earlier this month, CIPD research revealed that there could be one million workers on zero hours contracts in the UK – quadruple official estimates.
The Labour party is pushing for a full government consultation on zero hours contracts, and highlighted the new pay statistics ahead of a summit on the topic that it is holding with employer and employee bodies today.
“New evidence highlights that there could be hundreds of thousands more people on zero-hours contracts than previously thought,” said shadow business secretary Chuka Umunna.
“That’s hundreds of thousands of people in insecure work earning far less than average pay. Flexibility works for some, but the danger today is that too often insecurity at work becomes the norm.
“The huge spike in the use of zero hours contracts has brought increased reports of abuses and bad practice,” he added. “There should be zero tolerance of such abuse.”
Business secretary Vince Cable has already ordered a review of zero hours contracts this summer, saying: “For a contract now widely used, we know little about its effect on employers and employees.
“There is some anecdotal evidence of abuse by employers of vulnerable workers. Whilst it is important our workforce remains flexible, it is equally important that it is treated fairly.”
While CIPD figures have suggested that the use of zero hours contracts has been vastly underestimated, the institute has cautioned against assuming that all such contracts are “bad”.
“Zero hours contracts, used appropriately, can provide flexibility for employers and employees and can play a positive role in creating more flexible working opportunities,” explained CIPD chief executive Peter Cheese. “This can for example allow parents of young children, carers, students and others to fit work around their home lives.”
But he added: “There does need to be a closer look at what is meant by a zero hours contract, the different forms that they take, and clearer guidance on what good and bad practice in their use looks like.
“Zero hours contracts cannot be used simply to avoid an employer’s responsibilities to its employees.”