Work Foundation - New analysis reveals UK continues to fall behind rest of world as zero-hour contracts reach record numbers - and it's young people bearing the brunt

21 Mar 2024 12:09 PM

The Work Foundation at Lancaster University – a leading think tank for improving working lives – warns the number of young workers on zero-hour contracts has reached a new record and says the UK needs to ‘catch up with the rest of the world’ when it comes to zero-hour contracts and put power back in the hands of employees.

Its new analysis suggests 136,000 more workers were given zero-hour contracts in 2023 compared to 2022, and 65% of these new contracts were handed to 16–24 year olds (88,000).

Researchers say workers of all ages should have a right to guaranteed hours and more predictable shift patterns, while being able to opt in to zero-hour contracts only if workers themselves specifically request them.

While zero-hour contracts have previously been heralded as the solution to flexible work, analysis published yesterday by the Work Foundation reveals only a tiny minority of zero-hour workers experience regular pay and access to rights.

New data suggests three in four (73.5%) of the record 1.1 million people (aged 16-65) currently on zero-hour contracts in the UK are in severely insecure work, meaning they face contractual and financial insecurity, and a lack of access to rights and protections. Only 6.1% of the 1.1 million are in secure employment, with a regular income and access to rights.

Alice Martin, Head of Research at the Work Foundation at Lancaster University, said: “Zero-hour contracts have previously been hailed the answer to flexible work, but our research shows too often it is only employers that have choices, workers do not.

“The data shows these contracts affect certain workers more than others, and it is young workers – particularly young women – who are bearing the brunt of policy-makers inaction.”

The new data paints a particularly worrying picture for young workers in the UK with an 88,000 additional young people on zero-hour contracts in 2023, compared to 2022 – an increase of 23% (386,000 in 2022 to 474,000 in 2023).

The Work Foundation’s labour market experts warn of the potential long-term effects this could have on the quality of job young workers may secure in future – and if they stay in the labour market altogether. With a near record 2.74 million workers currently off work sick in the UK, researchers say this is a particularly concerning trend – which should be tackled immediately.

The new data, which investigates how zero-hour contracts are used in the UK, suggests they disproportionately impact certain workers – people who already face structural barriers in the labour market:

• Black workers are 2.7 times more likely than white workers to be on zero-hour contracts and workers from multiple/mixed backgrounds are 2.3 times more likely than white workers to be on zero-hour contracts
• Women are 1.2 times more likely to be on zero-hour contracts than men
• One in ten young workers in the UK are on these contracts in 2023 (13%). Young workers (aged 16–24) are 5.9 times more likely to be on zero-hour contracts – but these are not just students. Young workers who are not students are still 3.5 times more likely than other age groups to be on zero-hour contracts.

“More than one million UK workers are on zero-hour contracts at the moment as their main job,” Alice Martin continues. “While they may provide ad-hoc flexibility for a small minority of professionals who actively choose this way of working, our analysis suggests that for the vast majority, these contracts represent precarity.

“After a decade of indecision over zero-hour contracts, the UK has fallen behind and now our younger generation are paying the price. Other nations have already either banned zero-hour contracts or heavily regulated their use, so we need to catch up and find a better balance between workplace security and flexibility.

“For young people starting work for the first time, having a poor-quality job that provides irregular hours and pay can be a highly stressful first experience of working life. If they remain stuck in this kind of insecure work for long, it can really limit their chances to get better jobs in the future.

“Putting more power in the hands of workers would combat the unfair use of zero-hour contracts, and is a healthy step towards a secure and flexible jobs market.”

The Work Foundation outlines a series of further recommendations for the future use of zero-hour contracts in the UK, to extend contractual security and provide guaranteed hours, while maintaining options for flexibility. It calls for:

• Employers to provide guaranteed contractual hours for all roles (either hours per week, hours per month or annualised hours)
• Employees to be empowered to request a zero-hour contract under a day one flexible working request if their work is genuinely casual in nature. Their contracted hours should be protected and they should be able to reinstate them once the arrangement ceases. 
• Anyone working 25% more than their contracted hours should have a right to an amended contract, if they want it, that reflects their actual hours. 
• Employers of people working irregular hours should be required to provide a three-week notice period of their shifts, or with concessions for safety critical industries, ensuring the right to compensation for a cancelled shift if not followed.  
• Employers with a workforce of 250 or more people to be required to report annually on key employment data, including employment contracts (e.g. full time, part time, zero-hour, agency) and staff turnover, to enable better monitoring of employment practices by government agencies. 
• Labour market enforcement resourcing to be increased and Secure Work Taskforces to be set up with representatives of employers, workers, and regulators in sectors in which insecure work, including zero-hour contracts, are prevalent, to pilot alternative models such as digital self-rostering and bank systems, and negotiated sectoral standards for pay and hours. 

“The reality is most people feel trapped in these highly insecure jobs due to factors out of their control,” Alice Martin adds. “And, following a landslide in living standards, these workers are among the most vulnerable.

“A stable job and income have never been so important – but with insecure work now such an ingrained feature of the UK labour market, it is not something that can be solved overnight. Zero-hour contracts are just one of many issues that need resolving, but using our roadmap to reform their use will certainly take us closer to a more stable labour market and a happier and healthier workforce.”

The policy brief ‘Zero Choices: Swapping zero-hour contracts for secure, flexible working’ is published on the Work Foundation website: www.theworkfoundation.com