Zero-hours contracts just the “tip of the iceberg” claims the TUC

27th April 2015


Zero-hours contracts are “just the tip of the iceberg” when it comes to low-paid and insecure jobs claims new analysis from the Trade Union Congress (TUC).

The report showed that in addition to the 700,000 workers who report being on zero-hours contracts, there are another 820,000 UK employees who report being underemployed on between 0 and 19 hours a week.

The TUC urged that while zero-hours contracts have dominated the media headlines, short hours-contracts, along with other forms of insecure work, are also blighting the lives of many workers.

Underemployed short-hours workers are typically paid a much lower hourly rate than other employees. The average hourly wage for a short-hours worker on fewer than 20 hours a week is £8.40 an hour, compared to £13.20 an hour for all employees.

The TUC said that short-hours contracts, which can guarantee as little as one hour a week, can allow employers to get out of paying national insurance contributions.

The average underemployed short-hours worker would have to work more than 18 hours a week for their employer to start having to pay national insurance for their employment.

The TUC asserted that like zero-hours workers, many short-hours workers do not know how many shifts they will get each week and often have to compete with colleagues for extra hours.

Women are particularly at risk of becoming trapped on short-hour contracts, said the TUC, as they account for nearly three-quarters at 71.5%, of underemployed employees on short-hours contracts.

Retail is the worst affected sector. Nearly a third, at 29% of underemployed short-hour workers are employed in supermarkets, shops, warehouses and garages – nearly 250,000 people.

Education, at 16%, accommodation and food services, with 14% and health and social care, at 12% also account for large shares.

The growth in low-paid, insecure jobs since the crash has been bad for workers and the public finances, said the TUC, with taxpayers having to subsidise poverty pay through tax credits.

The TUC added that short-hour and zero-hours contracts, along with low-paid and bogus self-employment, have reduced tax revenues and are dragging down UK productivity.

Self-employment has accounted for nearly a third of the net rise in employment since 2010. Figures published last summer by the Office for National Statistics show that average earnings for self-employed workers have fallen by 22% since 2008/09.

TUC General Secretary Frances O’Grady said: “Zero-hours contracts are just the tip of the iceberg when it comes to low-paid, insecure work. Hundreds of thousands of other workers find themselves trapped on short-hours contracts that simply do not guarantee enough hours for them to make ends meet.

“Like zero-hours contracts, short-hour contracts give too much power to the employer. Bosses have an incentive to offer low wages and fewer hours to get out of paying national insurance. Without more decent jobs, people will continue to have to survive off scraps of work and UK productivity will continue to tank.”

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