Zero-hour Contracts September 2016

Thank you for contacting me recently about the effects that zero-hours contracts can have, particularly on certain demographic groups such as migrants and women.

I appreciate that in some circumstances zero-hours contracts can be useful for employees and employers, but I believe these contracts should be the exception, not the rule, and I am concerned at the increasing number of people who are employed on these insecure terms and as a result are unable to act against the poor working conditions they have to endure. 

Indeed, 1.5 million people are now estimated to be on zero-hour contracts. In March 2016 the ONS also reported that there were 801,000 people on a zero-hours contract in their main job, accounting for 2.5% of all people in employment. I know that too many of these contracts provide unpredictable hours, irregular pay and a lack of job security or certainty. 

The demographics of those on zero-hours contracts are also concerning: between October and December 2015 the majority (over 53%) of those on zero-hours contracts were women, 38% of those on zero-hour working contracts were between the ages of 16 and 24, and furthermore non-UK nationals were 36% more likely to be on zero-hour contracts than UK nationals. These groups are therefore significantly more vulnerable to the issues associated with zero-hour contracts.

At the 2015 General Election I stood on a manifesto commitment to ban exploitative zero-hours contracts, which was part of wider plans to reform the economy to ensure that it works better for working people. I also believe that those who work regular hours for more than 12 weeks should have the right to a regular contract.

Following a consultation during the last Parliament, the Government brought forward measures in the Small Business, Enterprise and Employment Bill to ban so-called 'exclusivity' clauses in zero-hour contracts. The Opposition were concerned that the measures did not go far enough to stop the exploitative use of these contracts, without a mechanism for enforcing the new restriction. The Shadow Frontbench at the time tabled an unsuccessful amendment to the Bill which would have strengthened protections for people on zero-hour contracts, including allowing a right to financial compensation for cancelled shifts and a requirement for employers to offer a permanent contract to people working regular hours over a continuous period. 

I believe the Government must also take its share of responsibility for failing to protect people from systematic exploitation. For example, the Employment Agency Standards Inspectorate has had its funding cut by over half since 2010 and has failed to bring a single prosecution in the past year. It should be easier and more affordable for workers to bring cases of exploitation and discrimination to employment tribunals. The Government should also ban exploitative zero-hours contracts and stop unscrupulous employers from undermining good businesses that do right by their staff.

As you may be aware, Sports Direct has agreed a deal with HMRC and the Unite union for Sports Direct workers to receive around £1 million in back pay. I welcome this deal as a great victory for everyone who has campaigned on this issue. However, Sports Direct got away with paying below the minimum wage for far too long. In fact, while an estimated 250,000 workers or more are not being paid the legal minimum, in the last Parliament it was revealed that only nine firms had been charged for breaching minimum wage legislation. I therefore also believe we need more minimum wage inspectors to catch and prosecute rogue employers. I am pleased that my Shadow Frontbench colleagues have committed to end the exploitation of working people, tackle low pay and protect people's rights in the workplace.

Thank you once again for writing to me and for sharing your views. I can assure you that I will continue to press the Government on this important issue and bear in mind the points you raise.