One Sided Flexibility: Short-hours contracts

Photo by Olivier Collet on Unsplash.

After the 1929 Wall Street Crash it became common for workers to line up outside factories and construction sites to enquire as to whether there was any work - if there was none they would be sent home. It would be easy to mentally link this type of insecure work arrangement to that of a different era, one with little employability legislation, lacklustre unionisation and exploitative employers.

However, today this type of insecure exploitative work continues to thrive under the electric light of courtrooms through contracts, complex employability laws and shiny careers websites.

The use of zero-hours contracts grew during the pandemic. Before March 2020, almost 1 million workers’ main income source was a zero hour contract, a figure that increased as businesses offloaded the risks of running a business through uncertain economic times onto the employees. However, another feature of the UK job market, that is possibly an even bigger problem, is  short-hours contracts.

What are short-hours contracts?

Statistics are currently showing a fall in unemployment; however, this is masking the reality of underemployment for many working people. An increasing amount of roles are offered on short-hours contracts leaving workers in insatiable work situations. A survey from USDAW, the union for retail and shop workers, found that a quarter of their members were only guaranteed 16 hours or less of work a week, however, 64% of their members were regularly working hours not guaranteed in their contract, of which 68% would like to see their actual working hours guaranteed in their contract.

With no guarantees over a crucial part of their income, workers cannot be sure of their ability to pay rent, or everyday bills as well as often being unable to access mortgages. For almost 40% of workers, over 20% of their income is composed of hours not specified in their contract.

Short-hours contracts can be beneficial for some workers genuinely looking for flexible part-time work. However, many employees on these types of contracts want to work more hours. USDAW’s 2017 survey into insecure work showed that a third of workers wanted to work longer hours, but were unable to increase their contracted hours. As a result 28% of workers either already had, or were seeking, a second job.

However, in some cases this is impossible when employers demand workers to be constantly available for overtime: an issue that was highlighted as part of the Taylor Review of Modern Working Practices in 2017. Some employers are transferring “excessive amounts of risk to workers” with “no corresponding benefit to the worker” from the arrangement. This has been described as “one-sided flexibility”.

One of the most clear-cut examples of this one-sided flexibility is the Tesco “flex” contract. Under this contract, which is widely used among their retail staff, workers are only contracted for short hours - typically under ten a week. However, in reality, as they are expected to be full-time staff without the security: as is stated in the contract.

“You are employed on a flexible contract and will be expected to work additional hours. These flexible additional hours will be agreed with your Manager. A minimum of 24 hours notice will be given, prior to any additional hours being worked. (...) Flexible additional hours combined with your core houses will be no more than 36.5 hours in any one week,(...) The Company needs you to maintain the flexibility you have specified. If you are consistently unable to work your flexible additional hours when you have been asked to, this may be considered a breach of your Contract of Employment and could result in disciplinary action up to and including dismissal.”

The inability of workers to pick up another job, due to needing to ‘maintain the flexibility’ for Tesco, and the ability of managers to cut shifts with only 24 hours notice creates an incredibly unstable financial situation for workers, in which the risks of the fluctuating profitability of the business is placed on the lowest-paid employees. It is hard to see how this type of working arrangement adheres to Tesco’s declared aim to ‘inspire colleagues to look after their whole well-being.’

The mental health impact that these types of contracts exert has also been researched by USDAW. For those who relied on hours that were not specified in their contract for at least 40% of their working hours, 73% reported that financial worries were having an impact on their mental health.

This is a problem that is particularly affecting young people: over half of 18-24 year olds are reliant on insecure hours for more than 20% of their income, with only 40% having contracts reflecting their normal working hours.

Those in insecure working situations were, in analysis by the TUC, also twice as likely to die from Covid-19 as those in more secure work due to a lack of sick pay, fewer rights and low pay.

How big is the problem?

Part of the problem is that there is little data on this issue, for example the UK’s Office for National Statistics only measures the number of people on zero hours contracts. However, two surveys published by the Living Wage Foundation show that almost two-fifths of UK workers receive less than a week’s notice of their shift patterns. An analysis of 7 million anonymised bank accounts in 2018 by the Resolution Foundation found that over 80% of low earners, with supposedly steady jobs, had volatile pay, in comparison with two-thirds of higher-earners.

The 2017 Taylor Report recommended that the Government should “consider the design and impacts of the introduction of a higher NMW (National Minimum Wage) rate for hours that are not guaranteed as part of the contract as a means to address the issue of one-sided flexibility.” USDAW has been campaigning for a minimum contract of 16 hours per week for everyone who wants it; a contract based on an individual’s normal hours of work and an end to zero hours contracts.

The Living Wage Foundation’s new Living Hours accreditation standard requires employers to give their employees a contract accurately reflecting hours worked, a minimum 16 hour week contract if wanted by the worker and at least four weeks’ notice of shifts, with compensation for cancellation during this period - some companies have already signed up, including Aviva and Standard Life Aberdeen.

However, it should not be a bonus when employers offer their employees the bare minimum - and these companies are outliers. As we come out of the pandemic, we must remember that our key workers were among the most likely to be in insecure working situations. As Boris Johnson himself  said, “We owe them a debt of gratitude”: surely offering those who kept the country afloat economic security is not too much to ask.

Tesco were contacted regarding their use of these contracts but declined to comment.