Government review to order zero-hours contracts overhaul

The government-commissioned inquiry into controversial working practices is set to call for employees on zero-hours contracts to be given the right to request a move onto fixed hours.

The BBC understands Matthew Taylor, the head of the Royal Society of Arts who is leading the inquiry, will say that some workers might be being exploited by businesses.

The “right to request” fixed hours will be similar to the present right to request flexible hours – after having a child for example.

Employers would have to respond “seriously” to the request and give reasons for their decision.

The move comes as the employers group, the Confederation of British Industry, revealed it backed the idea.

In its submission to the Taylor review, the CBI also said that all employees should have their terms and conditions set out in a written statement.

The new “right to request” fixed hours could be used by some of the 900,000 people on zero-hours contracts, a number that has risen from 143,000 in 2008.

The contracts have been attacked for allowing some firms to keep people in insecure work, depress wages and deny people their full employee rights.

McDonald's friesImage copyrightGETTY IMAGES
Image captionMcDonald’s says many of its staff prefer the flexibility of zero-hours contracts

Sources told the BBC that Mr Taylor had been struck by the example of McDonald’s, which offered all its staff on zero-hours contracts the chance to move onto fixed hours.

McDonald’s chief executive, Paul Pomroy, told the BBC that about 20% of employees on zero-hours had asked for a move.

But that 80% were comfortable with no guaranteed hours.

He said that for many employees such contracts offered the flexibility they wanted and that McDonald’s still offered full rights to people who worked on them.

“Our staff really appreciate the flexibility they get from zero-hour contracts,” Mr Pomroy said.

“Two years ago our staff started to tell us they needed some form of contracted hours because they wanted to get mobile phone contracts, car loans and – as they got older – mortgages to buy houses.

“So we had to change and listen to our people.

“And we have tested fully flexed contracts where you can either stay on zero hours or move to some form of permanent hours.

“Interestingly, 80% of people in our restaurants stayed on zero hours – they want that flexibility and 20% are moving to one of the offers around the fixed hours.

“In this modern world that we live and work in, it is not all the stereotype – we have students that want flexibility when they are studying, we’ve also got mums and dads that want flexibility around child care and grandparents that are earning a bit of money while looking after their grandchildren and they want to be off in the school holidays.

“Certainly don’t ban them.”

Tax avoidance?

Zero-hours contracts have been one of the most controversial issues connected to the changing world of work.

Labour has proposed banning them if it wins the general election and the Liberal Democrats have said they back a “right to request” change to employment regulations.

The rise in the number of self-employed people (45% of the record jobs growth over the last decade has been down to self-employment) has also raised questions over whether companies are using the “self-employment” status of people who work for them to avoid tax liabilities such as national insurance payments.

The Conservatives – which commissioned the Taylor review – said that they would look at new rights for people working in the “gig-economy” who are often classed as self-employed even though they may be regularly working for one company.

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Economy, General