Alarm at the rise in 'exploitative' zero-hours contracts in Scotland

New official analysis shows that the number on the contracts in Scotland has doubled in a decade and now stands at 94,000.

Critics say that zero-hours contracts create insecurity for workers and are used by employers to undercut wages and avoid holiday pay and pension contributions.

Calls have been made to ban the casual employment contracts which do not oblige employers to provide a minimum number of working hours. They also do not oblige employees to accept any of the hours offered by their employer.

It is also feared the rise of zero-hours contracts is having an impact on workplace bullying. The relative job security afforded by permanent contracts can make it easier for victims to come forward and lodge complaints.

Without the guarantee of work the next day, freelance and zero-hours workers risk everything when they speak out about mistreatment.

Analysis from the Labour Force Survey shows the typical number of weekly hours worked on zero-hours contracts has slumped from nearly 25.9 in the last three months of a pandemic-hit 2020 to 22.4 hours now. Those not on those contracts get over 14 hours a week more work.

Nearly two in three have been on zero hours contracts for two years or less with 38% on them for under 12 months.

Young workers, women workers and people born outside the UK are all more like to be in zero hours employment. The survey found that one in nine workers aged between 16 and 24 (11.7 per cent) are now on a zero hours contract.

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

"The negative impact of zero hours on job security and financial and social well-being cannot be underestimated," she said. "Workers, particularly younger workers are unable to plan effectively for even the immediate future impacting their housing, heating and overall ability to cope with the cost-of-living crisis.

"Zero hours contracts also remove a fundamental protection for workers who may be effectively removed from the active pay roll without reason bypassing their normal rights and leaving them prone to workplace bullying and anti-trade activity."

She said the STUC propose minimum hours contracts in which workers are guaranteed a set number of hours each week.

Ms Foyer added: "It would provide increased level of security based on normally expected hours – with flexibility for both employee or employer flexibility within an agreed range."

In 2013, the Conservative-Liberal Democrat coalition government launched a review of zero-hours contracts because of “a steady rise” even nine years ago.

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.

Two 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.

“You have to make some tough decisions that don’t work for everybody for the long term benefit of the business,” he said.

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.y But the change is said to have only applied to staff employed directly by Sports Direct. Ninety-four per cent 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 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.

Sports Direct 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.

Zero Hours Justice, a non party political campaign that aims at regulating fair working practises in the UK, has launched an accreditation scheme in Scotland to promote employers who do not use zero hours contracts or use them in a more "ethical and responsible way".

It said that the analysis shows that zero hours contracts are "all to prevalent in the Scottish economy".

Zero hours contracts are exploitative and unnecessary," said a spokesman. "They leave workers uncertain of how many hours they might work, how much they will be paid and how they plan their lives. Zero hours contracts are also bad for business, impacting on workforce morale and employee recruitment and retention."

The group is encouraging public and private sector employers who offer their workers fair employment contracts to sign up to their free accreditation scheme.

And it has now welcomed social enterprise The Fauldhouse Community Development Trust as one of the first Scottish organisations to sign up for accreditation to their scheme.

The trust joins Brent Council and jewellery retailer Beaverbrooks as the latest organisations to be recognised for their approach to fair employment. The Resolution Foundation said the increase in zero-hours contracts across the UK has been concentrated on the young and in hospitality. According to its analysis, other sectors that saw an increase in the use of zero-hours contracts in recent years included retail and health and social work.

The think tank noted that there has been a fall in economic inactivity since last summer but added that the accompanying rise in zero-hours contracts is a “reminder of the need to boost the quality not just the quantity of work”.

The Trades Union Congress has echoed concerns about "a huge explosion of insecure jobs" across the UK blaming the UK government.

TUC general secretary Paul Nowak said: “Zero-hours contracts have no place in modern Britain. They allow workers to be treated like disposable labour. They should be banned along with other exploitative working practices like fire and rehire.

“The Conservatives promised to make Britain the best country in the world to work in. But they have presided over a huge explosion in insecure jobs and are now attacking a host of other workers’ rights – including the right to strike.”

The GMB union has also raised its concerns about the spread of zero hours contracts across the UK Gary Smith, GMB general secretary said: “This Government is making history for all the wrong reasons.

“Rishi Sunak is presiding over a tidal wave of insecure work and exploitative zero hours employment is higher than ever. “The economy is stalling and his answer is to launch a bonfire of workers’ rights while other countries get with ending these contracts for good.

“Zero hours contracts are a key part of a broken employment model in sectors from social care to retail. It’s time for a government that will fight for workers’ rights.”

A UK government spokesperson said: “Over the past few years, the Government has acted to support workers at every turn, increasing the minimum wage to record levels and strengthening employment rights. This includes cracking down on the abuse of zero hours contracts by extending the ban on exclusivity clauses. We’re also supporting a Private Members Bill which will give workers the right to ask for a more predictable working pattern."