16 March 2016
Zero hours contracts have been a major topic of debate over recent times, and have featured in the news in the last few days with the New Zealand Parliament passing legislation to ban them from April 2016.
Back in Wales and the UK, the Office for National Statistics (ONS) published updated statistics on the number of people employed on zero hours contracts on 9 March 2016. This article provides an update to our previous blog post on the issue, and looks at the latest developments relating to devolved public services, particularly the social care sector.
What do the latest figures show across Wales and the UK?
The latest figures show that 48,000 people in Wales – 3.4% of the workforce – reported being employed on a zero hours contract in their main employment during October – December 2015. Across the UK, 801,000 people reported being employed on a zero hours contract – 2.5% of the workforce.
Of the devolved nations and English regions, Wales has the third highest percentage of its workforce employed on a zero hours contract, behind the North West and South West of England.
The latest figures for Wales show an increase of 13,000 from October – December 2014, when 35,000 people reported being employed on a zero hours contract – 2.5% of the workforce. NB: It isn’t clear how much of this increase is due to greater public awareness of zero hours contracts following the political and media attention given to this topic.
While more detailed figures for Wales are not available to show the likelihood of different demographic groups of being employed on zero hour contracts, at UK level we can see the following:
- Of people working on zero hours contracts, 37% would like to work more hours, compared to 10% of other people in work;
- Around 45% of those employed on zero hours contracts are employed in the food and accommodation or health and social care industries;
- Nearly 40% of those employed on zero hour contracts are aged 16-24; and
- Women are more likely to be employed on a zero hour contract than men, and comprise 53% of those employed on zero-hour contracts.
What’s happening in the devolved Welsh public sector?
The Welsh Government commissioned research into the use of zero hours contracts in devolved Welsh public services, which was published in July 2015. The research concluded that there are advantages and disadvantages to the use of zero hours contracts for both employers and individuals. However, it is widely accepted that the advantages tended to accrue to employers and the disadvantages to employees, as zero hours contracts transfer risk from the employer onto the employee.
The Minister for Public Services highlighted that the study raised issues for further consideration, such as the impact of uncertain earnings on workers, suitable advance notice of work, sufficient notice and compensation for cancelling work, fair distribution of work, and access to employment rights such as annual leave, sick pay and redundancy pay. The Minister stated that the Public Services Staff Commission would take this work forward, and their operational plan indicates that work will be undertaken in 2016-17.
What’s the latest in the social care sector?
The use of zero hours contracts in the social care sector, particularly domiciliary (home) care has received significant attention, and there’s been a number of recent developments in Wales.
According to Welsh Government figures, it is estimated the domiciliary care sector has a turnover of around 32% and a vacancy rate of 6%.
The issue was raised during the Health and Social Care Committee’s scrutiny of the Regulation and Inspection of Social Care (Wales) Bill. The Committee reported in July 2015 that poor terms and conditions for social care staff, including zero hours contracts, can lead to high levels of turnover in the social care workforce and have a detrimental impact on the standard of social care provision. The Committee noted the Minister’s view that the legislation would have an impact on the use of zero hours contracts within the social care sector as a result of its focus on the quality of care.
In July 2015 the Minister for Health and Social Services commissioned research into factors which affect the recruitment and retention of domiciliary care workers, which included zero-hours contracts, and how these impact upon the quality of domiciliary care. The research found that zero hours contracts dominated in the independent sector, with only those care workers employed by local authorities routinely having set contracted hours. The report states that most care workers consulted were unhappy with the insecurity zero hours contracts created (for example difficulties with obtaining mortgages) as, despite often working long hours, these hours were not guaranteed. The report recommends that the Welsh Government introduces regulation or commissioning practice to ensure the adoption of secure contracts of employment, with zero-hours contracts offered to create flexibility at the margins rather than being routinely used.
In January 2016 the Welsh Government announced new proposals to improve the quality of social care by restricting the use of zero hour contracts and ensuring employers pay domiciliary care workers the national minimum wage. The public consultation on the domiciliary care workforce notes that zero hours contracts can be beneficial to domiciliary care providers and domiciliary care workers as they provide flexibility. However they can also have a negative impact on the quality of care by, for example:
- Making recruitment more difficult by reducing the desirability of working in domiciliary care
- Having a negative impact on retention because domiciliary care workers may leave domiciliary care for jobs which offer regular hours and, therefore, regular pay each week
- Requiring service users to have to adapt to care which is not delivered by their regular carers and can be inconsistent.
The public consultation (which closes on 5 April 2016) lists ideas to limit the use of zero hours contracts and asks for views on how to effectively reduce the negative impacts of zero hours contracts on the quality of domiciliary care. The options listed include:
- Making domiciliary care providers publish the number of hours of care delivered by care workers on zero hours contracts;
- Giving all domiciliary care workers the choice about whether they are employed on a zero hours contract or a contract with guaranteed hours;
- Converting all zero hour contracts to guaranteed hours contracts after a domiciliary care worker has been employed for a specific period of time.
- Restricting the number of care hours or the percentage of care hours which domiciliary care providers can deliver by zero hours contracts.