Zero Hours Contracts – An Analysis

Zero Hours Contracts – An Analysis

We’ve all heard plenty about the infamous ‘zero hours’ contracts over the last few weeks – but what exactly are they, and how do they affect the home care industry?

First, let’s get a quick definition of these contracts. ACAS (Advisory, Conciliation and Arbitration Service) defines them as:

“The term ‘zero hours’ is generally understood to be an employment contract between an employer and a worker, which means the employer is not obliged to provide the worker with any minimum working hours, and the worker is not obliged to accept any of the hours offered.”

Essentially, those working zero hours contracts could work a full 40-hour week one week, then five hours the next. For businesses, they provide total flexibility – they can hire and fire staff at will. But for the employees themselves, there’s no job security, no perks, and they can find themselves unemployed through no fault of their own.

Zero hours in home care

The latest figures show that around 700,000 workers in the UK are on these fabled zero hours contracts. Of this figure, a staggering 300,000 work in the care sector, with 60% of domiciliary care workers living on these contracts. When combined with the other issues that the home care sector faces (15-minute visits, unpaid travel time, high employee turnover), the dominance of these contracts has raised real concerns about how long the home care workforce can carry on with this level of insecurity around their jobs.

With so many negatives surrounding zero-hours contracts, why are thousands of home care providers turning to them in such a time of crisis?

The answer is simple: the extremely low rates that local authorities pay for home care (as well as the insistence that councils only pay for home care by the hour) means that home care providers simply can’t take afford to guarantee hours for certain staff. According to UKHCA (United Kingdom Homecare Association), a high number of providers say that they would be unable to provide the same standards of service without the use of zero hours contracts – because the funding they receive from local councils for carrying out the service is too low to take on full-time or even part-time employees.

Another interesting statistic raised by UKHCA shows that only 24% of home care workers would opt for guaranteed hours when given the choice. This demonstrates that, though zero hours contracts do have their failings, there are many in the home care industry that enjoy the flexibility of it – they are perhaps more able to maintain a work/life balance with these contracts, raising families and even working second jobs as a result.

Grey areas

However, there are some grey areas when it comes to zero hours contracts. The majority of individuals on zero hours contracts are classed as ‘workers’, rather than ‘employees’. This denies them certain employment rights, including those of statutory notice periods – employers can fire their workers at will, meaning very low job security. This is an unacceptable situation for many workers that have families to support and need to keep up a stable income.

Zero hours contracts can also lead to problems with things like claiming benefits, with the Chief Executive of Citizens Advice stating that ‘zero-hours contracts can also mean fluctuating incomes that cause havoc with people’s benefit claims, denying them much-needed income when the hours dry up’. Renting property is also an issue – some individuals on zero hours contracts can’t prove they are able to afford private rental properties, and those who have no access to a guarantor are being forced to look elsewhere.

The Unique:IQ view

Here at Unique IQ, we believe that zero hours contracts can be a positive thing – but only when they are used in an ethical, responsible way. Many workers in today’s economic climate like the flexibility of these contracts, and enjoy being able to juggle a family life or run a small business in their spare time. But with so many grey areas, and with employee turnover already high within the home care sector, zero hours contracts are the very antithesis of what employers should be offering their staff in domiciliary care: security, stable hours and guaranteed pay.