The Office for National Statistics has released new figures that show nearly 700,000 people work on zero hours contracts - up 26% from last year. The problems caused by these contracts will
require a significant change in the law.
Whilst this increase may just be a result of better recognition of these contracts it is clear that zero hours contracts are a key feature of the UK job market. Employers are now well aware that these sorts of contractual provisions can reduce their labour costs in 'down time' and so have a clear incentive to use them.
It is also an effect of the way companies are structuring their services to be 'on demand' combining easy on-line access with pools of freelancers able to respond quickly to work requests. This agile service economy will grow more and more quickly and companies will increasingly adopt the zero hours model to shape their labour costs to demand. It may be increasingly attractive to public service providers looking to cut their costs in the face of funding reductions.
Although the furore over these contracts has led to some government action in bringing forward a change in the law to ban employers from stipulating workers cannot work for other employers when
on such a contract ('exclusivity') this is of marginal effect. The flexibility offered to workers is sometimes of benefit but uncertainty of hours and income prevents planning for carers and
Zero hours contracts allow employers to avoid dealing with grievances, redundancy and unfair dismissal claims by simply not offering any work - leaving workers without any remedy for unfair
treatment or their work being taken away. Problems also arise in qualifying for holiday pay and statutory sick pay further disadvantaging workers on these contracts.
There isn't a simple answer to this problem. What we will need is both fairer contracts and a social welfare system that is as agile as workers are being required to be.
That means banning exclusivity, clear provision for holiday and sick pay being part of contracts, clear rules on offering work that is available.
It also means a social welfare system that allows people to take up intermittent work without their income being critically reduced and flexible education to help build