Zero hours contracts in Scotland: Interim Report - Scottish Affairs Committee Contents

3  Uncertainty

Flexibility: an uneven relationship?

40. Workers on zero hours contracts have no guaranteed hours and, as a result, may have little job security. Supporters of zero hours contracts claim that the contracts provide flexibility for employers and workers but all too often the choice rests with the employer, leaving the individual waiting for a call which, if it comes, can be at very short notice with hours that are not ideal.[72] This lack of certainty and choice can put a great deal of pressure on individuals. As UNISON state in their evidence, "the need to respond to calls to attend work, frequently at short notice, disrupts life outside of work and places a particular strain on families and arranging care for dependants."[73] One in four zero hours workers who responded to Unite's survey reported not being able to find childcare that suited their irregular hours.[74]

41. Despite the strain, we heard that individuals in need of work are unlikely to turn down opportunities for work, no matter how disruptive they might be, for fear of seeing their hours reduced or stopped.[75]According to Unite, "there is clear evidence that workers are afraid that if they turn down shifts then they may not get others".[76] The CIPD found that 17% of individuals were sometimes penalised and 3% always penalised if they were not available for work when required.[77]
Box 6: PhD student - non-academic job

If you are needed, for example, and they call you up and say, 'Actually, we don't need you on that day of the week. We need you tomorrow,' and you can't do it, then maybe you will have no shift that week and you will not be paid. The thing is that, even as non­academic staff, it makes you rely heavily on management, whether they think that that service should be cut down and you should be sent home without further warning, or your line management—the person who gives you the hours. If they are not sympathetic, if you do not get on well with them, they can just not give you any hours or give you hours that you can't do.

Source: Justine Seran (Q409)

42. The threat, real or perceived, of the potential for a reduction in hours can also cause individuals to accept work when they are unfit to do so. Dave Watson explained that this was particularly worrying in the care sector: "you ask workers in that area and they will say, 'I have a cold. I will probably still go out because I am worried that they will not ask me back next week', and frankly you do not want your social care worker turning up at your house with your granny, blowing her nose and passing on the cold."[78] Justine Seran told us that in the university sector, if a tutor cannot do a class, "they will get another tutor on the same course to take your hours and they will log your hours and they will get the pay … Some people have been teaching the same course, Post-Docs, for six years, and yet they don't have access to sick pay; they don't have access to all that."[79]
Box 7: Former pizza worker

The zero hours contracts are used as a management tool to manage staff, i.e. staff they want rid of simply get their hours whittled away so they walk out. People are afraid to become sick or have other issues as they know the management often 'payback' through cutting of hours, or giving out shifts that don't suit.

Source: Anonymous (Unite the Union written evidence)

43. The Government believes that greater transparency and improved guidance for individuals and employers will correct the imbalance in the worker/employer relationship.[80] We fail to see how such steps will prevent workers being penalised if they decline work.

44. Some companies who use zero hours contracts do arrange shift patterns weeks in advance in order to ensure cover and provide a degree of certainty of work to the individual, but many do not. The CIPD's survey found that 42% of workers received less than 12 hours' notice of work and 10% between 12-24 hours' notice.
Box 8: University worker

I can be kept waiting until as late as Thursday night before finding out whether I have work the next week. There is no way to predict whether I will get nothing, or 5 days' work, meaning all other things have to put on hold until the last minute.[81]

Source: Anonymous (Unite the Union written evidence)

Lawrence Wason, Divisional Officer at Usdaw, told us he was aware of situations where groups of people receive a text in the morning telling them to turn up for work, only to find when they get there that there is not enough work for all of them: "A percentage of them who do not secure any work that day are then basically just told to go home. They will have to cover the travel costs themselves at that point in time, and, equally, they are not earning for that particular day."[82]
Box 9: Offshore worker

Sometimes you can turn up for your ticket and be turned away. You can actually turn up at the airport and the decision has been taken that you are no longer required because the job has been delayed or there has been a delay, so they just terminate the job completely.

Source: Jake Molloy, RMT (Q256)

45. The lack of guaranteed hours may suit some individuals, such as students who appreciate the flexibility to structure their work around study arrangements, or those for whom income from a zero hours contract is supplementary to a more permanent source of earnings.[83] Almost half of the zero hours workers who responded to the CIPD's survey reported they were satisfied with having no minimum contracted hours, while 28% of zero hours workers who replied to Unite's survey said that if they had a choice they would want to be on a zero hours contract. Unite explained that the 28% figure was similar to the proportion of workers who said they were eligible for sick pay, drawing a link between levels of satisfaction and access to employment rights although there is no direct evidence to link the two groups of respondents.[84]

46. In most circumstances employers are able to give reasonable notice of work yet over half of the zero hours workers surveyed by the CIPD received less than a day's notice. We find this lack of notice to be unacceptable and a symptom of lazy workforce planning. We recommend that zero hours contracts contain a minimum period of notice, both for work and the cancellation of it, which would apply unless there were mitigating circumstances which fell within specific criteria set out in the contract, such as the requirement to provide cover for unexpected absence. It should also be made clear that a worker is free to turn down work offered within the notice period without suffering any detriment. If work is cancelled at such short notice that travel expenses have been incurred then those expenses should be reimbursed by the employer plus an element of compensation for the worker's time.


47. Zero hours workers tend to be low paid and have little disposable income. This leaves them more susceptible to shocks to their income.[85] Over two-thirds of the zero hours workers who responded to Unite's survey said being on a zero hours contract made them feel anxiousthat there may be nothing or hardly anything next week.[86] Mark Epstein explained, "a lot of people have fixed outgoings and do not have significant fixed work, that creates a lot of anxiety".[87]
Box 10: carer

A West of Scotland CAB reports of a client who has been working under a zero hours contract since April 2012 as a carer in the community. She has received 30 hours per week until approximately 2 months ago when the hours dropped significantly.Her employers are awaiting the outcome of a contract bid to the Council and are taking on many more staff. The new staff are jobseekers and the company receives government payments for taking them on.As a consequence all of the additional hours are being passed on to them, leaving existing workers with hardly anything. Some weeks the client works 4 hours, some she works 10, last month she had to borrow money to get petrol so she could drive to work. Today she spoke to her employer and asked to be paid off but the employer refused saying they would need to keep her on and hopefully the hours situation would get better in two months' time. The client cannot afford to carry on working there, but she is afraid that if she leaves her job voluntarily she will be sanctioned by the Job Centre.

Source: Anonymous (Citizens Advice Scotland written evidence)

48. The varying hours and pay which zero hours workers experience can make it difficult for them to budget and manage household costs. Citizens Advice Scotland told us they had seen numerous cases in which clients on zero hours contracts had experienced a sudden drop in their hours, making it difficult for them to meet their basic living costs. This can lead to debt and an inability to keep to debt repayment plans which, according to Citizens Advice Scotland, can leave workers with "little choice but to access high interest credit such as pay-day loans."[88]

49. Workers on zero hours contracts are also very restricted in what they can do to improve their lifestyle, as Pat Rafferty explained to us:

    If a young couple on zero-hours contracts goes to a bank to try to get a mortgage for their first house, they won't get it. The banks won't grant you a mortgage on a zero-hours contract. You will not get a bank loan or credit for a car. That builds into the anxiety as well. You are caught in a bubble, and it does little for the economy in that sense.[89]

Normalising zero hours contracts through model clauses and a Code of Practice will do nothing to help people who need financial certainty in order to secure themselves a home. The Government must pursue measures that will encourage organisations to reduce their use of zero hours contracts and instead offer contracts of employment that will provide workers with the security they need.
Box 11: PhD student

Being enrolled as a post-graduate student and my partner not having a wage or income available to support both of us, it has been really difficult to get a lease for a flat because on my contract it doesn't say how many hours, how much I earn every month, and it's going to change every month.

Source: Justine Seran (Q425)

No need for uncertainty?

50. Zero hours contracts are often explained as a means of granting employers the flexibility to cope with fluctuations in demand for staffing or to provide cover for staff absence. In reality, their use is not restricted to these purposes. The CIPD's study of zero hours contracts shows that 20% of zero hours workers are on broadly the same hours each week. The use of zero hours contracts in these circumstances cannot be explained by a need for flexibility. Dave Watson suggested that, for individuals working regular hours, "there was no need for zero hours contracts at all. Even with the 50% where there were fluctuations, I would say that that is just lazy workforce planning."[90] Many organisations are able to manage without using zero hours contracts: local authorities have moved away from using them directly and most major supermarkets are able to respond to business fluctuations without them.[91] We discuss below some areas where zero hours are used extensively.


51. While some higher education institutions classify zero hours staff as 'workers' with the attendant minimum level of benefits, most Scottish HEIs seek to give zero hours contract holders 'employee' type conditions. But, even with parity in terms of employment benefits, zero hours workers still lack the guarantee of future work.[92]According to the UCU, teaching staff on zero hours contracts will often be without an income during holiday periods, including the long summer break, without knowing if they will be allocated work in the new academic year. Justine Seran explained that:

    it is also mentally distressing because you never know if you are going to be teaching next semester. I have just finished classes last week, and I have no idea whether I will be able to have an income in September. It will depend on student enrolment; it seems as if the whims of other people will determine whether I will be able to do a job, to be able to work, so also mentally it takes a toll.[93]

52. The UCU argue that, because teaching work is planned over a long period, at least a semester or a year, it is difficult to understand the need for flexibility in the provision of academic and related services.[94] Mary Senior told us that there didn't appear to be any "justifiable reason" why universities were using zero hours contracts rather than permanent or fixed-term contracts: "it is just lazy and too easy for them to give a zero hours contract".[95] The Universities and Colleges Employers Association (UCEA) contest this view:

    HEIs have legitimate and longstanding needs for a measure of flexibility in the workforce. Unpredictable and changing patterns of student demand, the need for specialist subject input and the practical need to provide cover for absences or occasional peak activities all call for some flexibility in staffing, both in teaching and in a range of support services (such as catering, accommodation, library services, security, exam invigilation, etc.). In many cases, those who do this work are themselves students, while many others have a primary source of employment outside of higher education.[96]

The UCEA assert that "variable hours contracts" offer mutual benefits for employer and employee while ensuring efficient HR procedures: "In addition, where the small number of variable hours repeats from time to time, this is an efficient administrative approach, avoiding the need for repeated issuing of low hours contracts and all that goes with that in respect of HR and payroll administration". Zero hours contracts also allow universities to cancel courses at short notice without incurring significant costs, as Justine Seran explained:

    there have been cases in our university of people on a zero­hours contract being asked to design and deliver a semester-long course and the course being cancelled one week into it because there had been seven student enrolments, which was below the eight-student limit; therefore, the course was cancelled and that person got paid for one week, although they had been preparing a semester-long course.[97]

53. The evidence from the UCEA shows that, as well as allowing both parties flexibility, employers also use zero hours contracts to minimise their HR costs. But a reliance on zero hours workers can have potentially damaging consequences for employers. The UCU set out examples in their evidence:

·  No guaranteed staff for whole areas of the institution's service provision;

·  The use of such contracts will affect the employers ability to attract and retain high quality staff;

·  Potential reduction in continuity and quality of services provided;

·  The exclusion of such staff from robust recruitment, training, induction, and CPD appraisals has the potential to affect the quality of service provision.[98]

Mary Senior told us that she knew of no one who was on a zero hours contract through choice.[99]
Box 12: PhD student

Rarely is our work treated by others as work, as a job with a contract attending, with rights attending to it. It is a shame, because it is not a hobby for us. A large majority of PhD candidates today are self­funded. We do not receive money from anyone, not even parents or research councils, so we count on it also as an income in parallel to our studies. Most of the time it is not how it is being presented or treated by the university.

Source: Justine Seran (Q382)

54. The UCU told us that it had been difficult to get universities to see that zero hours contracts are a problem and engage on the issue.[100] Nonetheless, the University of Edinburgh has agreed to review itspolicy on zero hours contracts with a view to ceasing their use; the University of Glasgow has agreed, in principle, to review its own'atypical workers' policy; and the University of Aberdeen has set up a working group to review its use of zero hours contracts. While we welcome the universities' recognition of concerns surrounding the use of zero hours contracts, their reviews must not be used as a delaying tactic. Universities are in receipt of large sums of public money, the Scottish Government should use its influence to see that Scottish HEIs commit to action and reduce their use of zero hours contracts.


55. The use of casualised labour is commonplace within the rail industry. Zero hours contracts and other forms of casual labour are used by Network Rail to help develop and maintain the rail infrastructure.[101] According to the National Union of Rail, Maritime and Transport Workers (RMT), out of 88-90,000 Personal Track Safety (PTS) workers[102] only 20-22,000 are directly employed by Network Rail, and just 10% of the remainder are directly employed by a contractor. Approximately 60,000 PTS workers are therefore casual labour employed through agencies, on zero hours contracts or as 'bogus' self-employed.[103] Irrespective of the contractual arrangements of employment, Network Rail remains the ultimate paymaster for these workers.[104]

56. Network Rail is publicly funded through a series of five-year 'control periods'. Mick Cash, Senior Assistant General Secretary at the RMT, told us that a control period represents five years of money and five years of work: "In the five years from April of this year, [Network Rail] are going to spend on operating, maintaining, enhancing and renewing the railway somewhere in the region of £38 billion."[105] Control periods allow Network Rail to plan their spend and work over a long timeframe yet, despite the steady workstream, Network Rail uses a casualised work force who have little job security. In their January 2013 Strategic Business Plan Network Rail committed to increase further the use of contractors:

    Overall, headcount is projected to reduce over CP5 (Control Period 5 2014-2019) by around 1,050, which is equivalent to a reduction of 8% in total workforce. [...] Track direct employees have the greatest absolute reduction of around 800.

    We will achieve efficiencies of 18% by the end of CP5 by making greater use of Tier 2 contractors [...][106]

Mick Cash explained that Network Rail carried a lot of vacancies in Scotland:

    there is a 12% vacancy gap and they have the funding arrangements. In one particular department-the overhead line department-they have to renew certain parts of the network, and in that department they are carrying 25% vacancies because they won't fund up the vacancies. For that reason, they don't have the staff-they've got the money-to do the work. Therefore, they've got to use agency workers [...].[107]

57. Network Rail is reviewing the use of zero hours workers in the rail industry including its own contracting arrangements and how they influence behaviour throughout the supply chain:

    This review is still being carried out with a view that, in 2014, Network Rail will implement a new approach to how it uses labour-only agencies which will positively influence the way that the wider industry contracts with its workers.[108]

The RMT union contend that the steady flow of funding means that work could and should be taken in-house by Network Rail. Doing so would bring a degree of stability to the worker and allow them to benefit from the rights accorded to employees.

58. We accept that zero hours contracts may be justified in a limited number of circumstances which genuinely require flexibility (on either side). We do not believe that the level of flexibility demanded by employers such as Network Rail and some Scottish universities is matched by their business need. If large organisations such as most major supermarkets and local authorities can cope without zero hours contracts then so can many others. Reducing HR costs or improving administrative efficiency are not acceptable reasons to deny workers the stability that comes with being an employee with guaranteed, contracted hours. Organisations must reduce their use of zero hours contracts and Governments should use every lever they have to encourage this change in behaviour.

72   CIPD, Zero hours contracts: myth and reality, Research Report, November 2013; and TUC, Ending the abuse of zero hours contracts: TUC response to BIS consultation, March 2014 Back

73   UNISON (ZHC0015)  Back

74   Unite the Union (ZHC005) Back

75   Unite the Union (ZHC005); Educational Institute of Scotland (ZHC007) Back

76   Unite the Union (ZHC005) Back

77   CIPD, Zero hours contracts: myth and reality, Research Report, November 2013 Back

78   Q275 Back

79   Q408 Back

80   Department for Business, Innovation and Skills, Consultation: zero hours employment contracts, December 2013 Back

81   Unite the Union (ZHC005) Back

82   Q103 Back

83   Citizens Advice Scotland (ZHC003); UNISON (ZHC0015) Back

84   Q56 Back

85   Citizens Advice Scotland (ZHC003) Back

86   Q46 Back

87   Q46 Back

88   Citizens Advice Scotland (ZHC003) Back

89   Q52 Back

90   Q323 Back

91   Usdaw (ZHC0014) Back

92   Educational Institute of Scotland (ZHC007) Back

93   Q380 Back

94   University and College Union (ZHC002) Back

95   Q402 Back

96   Universities and Colleges Employers Association (ZHC0010) Back

97   Q359 Back

98   University and College Union (ZHC002) Back

99   Q404 Back

100   Q390 and Q445 Back

101   Q137 Back

102   PTS workers are those permitted to work on the track. Back

103   Q146; 'Bogus' or 'false' self-employment is often used to describe the use of employment intermediaries such as payroll companies to disguise employment as self-employment and thus avoid employment taxes and deny employment rights to their workforce. In the 2013 Autumn Statement the Government promised to clamp down on companies disguising employment as false self-employment.  Back

104   Q146 Back

105   Q145 Back

106   Network Rail, Strategic Business Plan for England and Wales, January 2013, p35 Back

107   Q188 Back

108   BBC News, Zero hours concerns over rail safety, 10 March 2014 Back

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Prepared 14 April 2014