Are Zero Hours Contracts Becoming a Thing of the Past?
Recent statistics published by the Office for National Statistics (ONS) suggest that the number of workers on zero hours contracts has dropped to the lowest level in over three years.
The report published by the ONS shows that there were 1.4 million zero hours contracts in May 2017, which is a decrease of 300,000 over the last year alone.
It is possible that this fall is due to the increasingly negative perception of zero hours contracts in the media and calls from the Labour party for them to be banned.
Despite this the recently published 'Independent Review of Employment Practices in the Modern Economy', led by Matthew Taylor (the Taylor Review) suggests that zero hours contracts remain a popular option for those who wish to work more flexibly. Students, for instance, benefit from the opportunity to maintain a balance between work and study.
Best Practice
Whilst recognising that a total ban on zero hours contracts would hinder the flexibility of the UK job market, the Taylor Review proposes that the Government should help to create more security for workers where it is appropriate and desired by the worker.
The Taylor Review recommendations in relation to zero hours contracts include:
- A higher rate of pay for hours that are not guaranteed under an individual's contract. This is intended to incentivise employers to guarantee hours where it is reasonable to do so in their business.
- Introduction of the right to request a guaranteed hours contract to reflect the actual hours worked where an individual has been working under a zero hours contract for 12 months.
- A requirement on companies of a certain size to report on how many requests they have received from zero hours workers for fixed hours.
Whilst zero hours contracts continue to provide a useful tool providing flexibility within the workforce, the decline in the use of these contracts would suggest that employers are re-considering whether they meet the needs of their organisation. Fluctuating arrangements can, over time, develop into a more regular and predictable need for work and it is important to keep contractual relationships under review to ensure they reflect the employment relationship in practice.
It remains to be seen whether the Government will implement the recommendations made by the Taylor Review and we will keep you updated with developments.
For more information, please contact Eleanor Boyd in our Employment Team on 020 7665 0842.