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Zero-hours contracts face government review

Posted on 09/07/2013

As zero-hours contracts become more widely used for health and social care workers, the debate about whether they should be used at all is raging. Business Secretary Vince Cable has announced that a review of the current zero-hours system is taking place, to prevent the exploitation of workers and to offer more security for employees.

It’s estimated that around 307,000* adult social care workers in England are on zero-hours contracts sector (a figure that is much higher than the official statistics from the Office of National Statistics). MP Andy Burnham, the Shadow Health Secretary, described this statistic as ‘depressing’ shortly before speaking on the subject at the Local Government Association Conference 2013 in Manchester (2-4 July). He tweeted (@andyburnhammp) before his speech: “Good care isn't given on zero-hours basis. How can people who don't know what they earn one week to next pass a sense of security to others?”

First, though, what is a ‘zero-hours contract’? It’s a contract in which employees are not guaranteed a fixed number of hours each week and are asked to work when they are needed, being paid only for the hours that they work. As an employer, there is no obligation to provide work, and the employee doesn't have to accept the hours offered. The Work Foundation has provided a good infographic to show the key facts about zero-hours contracts here.

From a care providers point of view, there are clear benefits in having their employees on zero-hours contracts. They only need to pay for carers when they need them, rather than having a large pool of staff being paid and not enough work to go around. With personalisation of services in the care industry, clients are free to move around different service providers to meet their needs, so any one care provider’s demand for work can go up and down.

For paid carers on these zero-hours contracts, the benefits are not as clear-cut. The obvious disadvantage is that there is a lack of consistency in working hours and earnings from week to week, as there is no guarantee of work. Because some zero-hours contracts require employees to be available for work, this could restrict them from taking on other work that might conflict with their main employer. It’s also difficult for those with children who need to arrange childcare, as work can often be offered at short notice.

Another issue is the pay itself, which is often lower than equivalent staff on a permanent contract. Also, while the employee has the right to turn down hours, in reality there can be a pressure to take on all the hours offered, even at short notice, to ensure that hours are offered in the future. Depending on the nature of a zero-hours contract, employees could juggle a couple of different jobs at one time, ensuring that when one employer doesn't need them, the other might, offering more long-term security. This only works if an employer doesn't ‘punish’ an employee for not being available when needed if they are already engaged in other commitments, and it is this practice that needs to be regulated if there is going to be a place for zero-hours contracts in the care sector.

This is not to say that there are no advantages for those paid carers who are on these types of contracts, especially in comparison to being self-employed or hired on a casual basis. Being employed means that things like tax, National Insurance and Public Liability Insurance are all taken care of, and the paid carer is entitled to employee rights and benefits offered by the care provider. It also means that they can receive training to ensure that they are of a high enough standard to be offered work, as those good at providing care will get more clients. There is a degree of flexibility for the paid carer in deciding what hours they want to take on, but they don’t have to look for their own clients as they would if they were self-employed.

There certainly seems to be a place for zero-hours contracts in the care sector at the moment, but it needs to be regulated by a code of practice to protect staff. Hopefully this is something that will be addressed as a result of Vince Cable’s review in the near future.

If you want to find out more about zero-hours contracts, then we have dedicated information on the website.

*According to research by Skills For Care from the National Minimum Dataset for Social Care (NMDS-SC May 2013). You can see a breakdown of estimates by region here.

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