• ‘Lazy’ employers ‘should pay a premium for zero-hours contracts’

  • 18 Apr 2017
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Taylor review suggests new rates to discourage insecure work – but general election may delay findings

The introduction of a premium rate for zero-hours contracts could act as a deterrent to ‘lazy employers’ pushing job risks and insecurity on to workers, according to the head of a governmental review into employment practice.

Matthew Taylor made the suggestion as part of his ongoing exploration of the gig economy and other new forms of work. Official figures have found there were 905,000 people on zero-hours contracts in the final quarter of 2016, 101,000 more than the previous year, with the review describing the position of many such workers as “precarious”.

“The problem in the labour market is not security of work, it’s security of income,” Taylor said in an interview with the Financial Times. “We’ve been hearing today about people in the social care sector who are told ‘be ready to leave the house at 7 in the morning’, then a phone call [comes to say] ‘no we haven’t any work for you today’.”

The suggestion of a zero-hours premium, which would force companies to pay a top-up on the minimum wage for hours not guaranteed in advance, is one solution he said he was considering to address issues around “one-sided flexibility” from workers.

“I think we can encourage employers to be a bit less lazy about transferring risk, even if it means [an employer] offers 15 hours a week rather than one hour,” he said.

However, Taylor stressed the idea was still very much up for discussion. It follows other suggestions he has floated while he hears evidence from interested parties – including the possibility of a freshly defined ‘worker’ status to create greater distinction between employed and self-employed individuals, and the requirement of defining employment status to shift from individuals to their employers.

Research from the TUC in February found that the number of people without guaranteed hours or baseline employment rights had increased by more than 27 per cent over the past five years, with figures suggesting the Treasury loses more than £75m a week through the abundance of low-paid and ‘insecure’ jobs.

But acting CIPD chief economist Ian Brinkley said there was evidence employers had begun to demonstrate “waning enthusiasm” for atypical contracts.

The Taylor review itself may be adversely affected by today’s announcement of a snap general election on 8 June. Under so-called purdah rules – which prevent the government from announcing any new legislation or initiatives for six weeks before the election date – it could be delayed or suspended, it has been suggested.

Read more: Taylor review hears case for and against the gig economy

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  • I agree 100% with Patrick. There is a coterie of people who have little/no idea how this country works and what its people want.   I've had a meeting with my MP about this very subject.  Zero hours contracts offer many folks just what they want, the flexibility to say yea or nay to work and as long as there is no restrictive clause preventing working for other companies there is no issue.

    What about those who work weekends as DJs, bouncers, waitresses, bar staff etc for events and similar businesses, who may or may not be free/not wish to carry out certain engagements?  

    The lunatic suggestion that after x amount of time on a zero hours contract will result in 'guaranteed hours' being offered to, say, weekend bar staff who occasionally work for an outside catering company simply beggars belief.

  • I think this is horrendous, i have offered all my zero hours employees permanent contracts with a fixed salary but almost all have turned this down as they want to have the flexibility of zero hours contracts.