Labour pledges a ban as Scots zero-hour contracts hit record levels

It comes despite a six-year-long ban on the contracts imposed in the public sector by the Scottish Government.

The Labour Party has attempted to set the record straight to the Herald on Sunday  while the UK's biggest and most influential unions warned there must be a total ban on exploitative zero hours contracts.

In November 2018, a fair work agreement in the public sector made by Scottish ministers and unions which sought to "recognise that security of employment, work and income are important foundations of a successful life" stated that zero hours contracts (that is, contracts which compel staff to make themselves available for work offered) will not be used..."

The numbers are estimated to have doubled since the UK government promised to review the use of the controversial practice eleven years ago.

Zero hour contracts have been criticised by workers' rights groups as they offer no guarantee of regular working hours, create insecurity for workers and are used by employers to undercut wages.

Critics have also raised concerns over how the rise of zero-hours contracts is having an impact on workplace bullying. It is felt the relative job security afforded by permanent contracts can make it easier for victims to come forward and lodge complaints.

Some zero-hours contracts require workers to take the shifts they are offered, while others do not.

According to an Office for National Statistics survey just 1.5% of managers, directors and senior officials are on zero hours contracts, while this rises to 9.8% for sales and customer service staff.

In the past year the typical number of hours worked each week in a main and second job for those not on a zero-hours contract was 32 hours. For those on zero hours contract it plummets to almost half - at just 18.4 hours.

While 3.3% of Brits are on such contracts, this rises to 4.6% for those who are not from the UK.

And some 11.7% of workers have been on the contracts for over 10 years.

Labour, the favourites to win the forthcoming General Election on July 4, have been accused of watering down some of key elements of the so-called “new deal for working people”, including a ban on zero hours contracts.

The vow to ban zero-hours contracts is expected to let some workers in certain circumstances to keep the status.

Unite union general secretary Sharon Graham told the Herald on Sunday that nothing more than a ban will do.

Labour says its zero hours ban will be based upon a similar 'ground-breaking' model used in Ireland and brought in five years ago.

Shadow Scottish Secretary Ian Murray told the Herald on Sunday: “Labour’s New Deal for Working People will put power and wealth into the hands of workers and our commitment to these transformative plans is ironclad.

"We will ban exploitative zero hour contracts, end fire and rehire, make work pay, expand sick pay and more.

“The Tories have taken a wrecking ball to workers’ rights while the SNP has opposed Labour’s plans – but Labour will deliver the change that Scotland’s workers need.”

Ms Graham has already been putting pressure on Labour to commit £6.6 billion over the next six years to save over 30,000 Scots oil and gas jobs by the end of the decade as it revealed that it has diverted funds that would be expected to be used to elect a Labour government as part of a rebellion over its energy policy.

Unite has hit out at Labour's policy of banning new licences for oil and gas projects in the North Sea following concerns over major job losses by 2030.

Ms Graham, the biggest union backer of Labour previously told the Herald on Sunday that she had "no problem whatsoever being on the naughty step" over pushing the campaign to save and create new jobs in Scotland warning that the nation's oil and gas workers are heading toward becoming "the coal miners of our generation" through the loss of jobs.

And she has suggested that the union could divert funds that would normally be set for election funding to back a campaign to ensure workers' rights plans are not diluted.

She said: "For me it is a ban. You have to ban zero hours contracts. Nothing else will work. And that is what I am pushing for.

"If you don't ban them outright you will get exploitative employers who will use it. That is the problem."

In 2015, the Labour Party's manifesto said that it will "ban exploitative zero hours contracts" and added: "Those who work regular hours for more than 12 weeks will have a right to a regular contract.” This pledge was repeated in Jeremy Corbyn's 2017 manifesto and a subsequent 2019 blueprint.

But Labour has come under fire for a loophole that would allow staff to continue to work under zero hours contracts in certain circumstances, similar to the position in Ireland.

Under revised plans first hinted at earlier this year, employers would be required to offer a contract based on regular hours worked allowing staff to opt to stay on zero hours.

This has raised concerns that it would trigger a power imbalance that managers could exploit to pressure workers into accepting insecurity around pay and working hours.

Ms Graham said: "I sometimes think there isn't a realisation over the relationship between the employer and the employee.

"Saying that workers have the right to ask for a regular contract is like saying they can ask for Christmas for 12 months of the year. It isn't going to happen. A lot of the time these contracts are used as a way to push down with no guaranteed hours.

"How can anyone work in that situation. It is totally and utterly wrong for that to be the case."

Scottish Trades Union Congress general secretary Roz Foyer has said the rise in zero hours contracts is a "disgrace" and said that they should be done away with.

In March, Labour's shadow chancellor Rachel Reeves in the Mais Lecture at the Bayes Business School revealed what is seen by some as a more watered down approach saying: "We will ban exploitative zero hours contracts, by giving all workers the right to a contract that reflects the number of hours they regularly work, based on a twelve-week reference period.

"But these changes will not stop employers from offering overtime or meeting short-term demand, such as in the build-up to Christmas or seasonal work in agriculture or hospitality."

The Irish legislation, Labour is following bans the if-and-when zero contracts except in cases of genuine casual employment or in emergency situations.

The Employment Bill was described by Ireland’s politicians as one of the most significant pieces of employment law in a generation.

They introduced a new minimum payment for employees called into work but sent home again without work.

A banded hours provision in Ireland hinted at by the shadow chancellor was a new right for employees whose contract does not reflect the reality of the hours they habitually work.  They will be entitled to be placed in a band of hours that better reflects the hours they have worked over a 12 month reference period.

Labour insists its mechanism for banning zero hours contracts has remained the same since 2015.

They say the Trades Union Congress consider their mechanism based on the Irish model to amount to a ban.

It comes despite the SNP making its moves to try and abolish what they called "an unfair employment practice" which did not give people job security.

It made moves to stop employing anyone on zero hours contracts.

And they introduced new guidance to ensure that companies bidding for public sector contracts don’t use exploitative zero hours contracts.

The party said: "Far too often zero hours contracts are used, not to provide flexibility, but to exploit workers. This can mean denying employees regular or sufficient working hours or penalising them for not being available to work.

"We believe the exploitative use of these contracts, where they are used just to avoid giving workers the protections they are due, should be banned."

The Scottish Government fair work agreement states that it was drafted on the basis of how "ministers expect employee and industrial relations to be carried out..."

It says that all relevant bodies were "expected to comply with the principles set out in this agreement as a matter of consistency, fairness, equality and good practice..."

The Scottish Government's 2018 working conditions agreement states it was made in line with the principles of the Fair Work Convention's Framework which "aspires to make Scotland a world leading nation in fair work."

In 2013, the Conservative-Liberal Democrat coalition government launched a review of zero-hours contracts because of “a steady rise” in the practice.

Vince Cable, the Liberal Democrat business secretary, noted “anecdotal evidence of abuse by certain employers – including in the public sector – of some vulnerable workers at the margins of the labour market”.

At the time, there were 46,000 workers with zero hours contracts, but this total has mushroomed as of the end of 2022, according to Office for National Statistics data.

The row over zero hours contracts hit the national consciousness when it emerged ten years ago that billionaire Mike Ashley's Sports Direct's entire 20,000 part-time workforce were on zero-hour contracts.

In 2016, Sports Direct said that it would offer casual retail staff guaranteed hours instead of zero-hours contracts and ensure all warehouse staff are paid above the National Minimum Wage following a stinging review into working practices at the retailer.

But the change was said to have only applied to staff employed directly by Sports Direct. 94% of the 3,200 staff at its much-criticised Shirebrook warehouse that were contracted through agencies were said not to benefit.

Mike Ashley, the firm’s billionaire founder, had told MPs he was unaware that employees could potentially earn less than the minimum wage while he admitted around 80% of store workers were on zero-hours contracts.

However, a law firm report said he took "ultimate responsibility for any aspects of the working practices that were unsatisfactory”.

Sports Direct hired law firm RPC to review employee procedures and corporate governance after coming in for a raft of criticism from politicians and unions for paying workers less than the minimum wage and implementing “Victorian workhouse” conditions at its Shirebrook warehouse.

It said that it would also suspend its “six strikes and you’re out” disciplinary procedure and pledged to pay warehouse staff above the National Minimum Wage.

Three years ago the group that owns Sports Direct excused its use of zero hours contracts, calling them “tough decisions that don’t work for everybody”, as it faced an investor rebellion over high pay for its top bosses.

Finance director, Chris Wootton suggested that zero hours contracts, which Fraser Group - formerly known as Sports Direct International plc - introduced for store workers at House of Fraser and Evans in the previous year, had helped keep those businesses afloat.

The Confederation of British Industry which represents 190,000 businesses declined to comment.

A UK Government spokesman said:  "Zero hours contracts are in place to help individuals who may need to balance work around other commitments such as childcare and study."

A Scottish Government spokesman said: “The Scottish Government believes all employees must be paid fairly for the work they do, and we oppose the inappropriate use of zero hours contracts and other non-standard types of employment that offer workers minimal job or financial security.

“Currently, responsibility for employment law, including zero hours contracts, remains reserved to the UK Government. However, we will continue to use our Fair Work policy to drive up labour market standards for workers across Scotland, supporting an economy that is fair, green and growing, while creating more secure, sustainable and satisfying jobs.”