Jim Wright, partner, employment, at law firm DWF, told FoodManufacture.co.uk: “Questions to parliament have revealed that the number of staff engaged by the Department for Business, Innovation and Skills [BIS] to regulate Employment Agency Standards has not been more than two for the past few years.
“While the government has begun to name employers found guilty of failing to pay national minimum wage, the low number of investigations and prosecutions demonstrates a similar lack of funding.”
Wright said during the recession employers had increasingly used zero-hour contracts, which put employees on call and only compensate them for the hours they work, with bosses not obliged to provide work. He recognised that they offered obvious benefits. “They enable employers to match labour costs with periods of activity and avoid excessive staffing costs during quiet times.
“The use of such contracts is lawful, permissible and many employees prefer the flexibility.”
However, he stressed that there were down sides. “Employee representative organisations have highlighted unscrupulous employers who disguise the true nature of the employment relationship or where such relationships prohibit employees from doing other work when they are not being used.”
Exclusivity clauses
In June, employment minister Vince Cable announced a Bill to ban exclusivity clauses preventing workers on zero-hour contracts from working for anyone else, which potentially severely limit their hours of paid work.
Wright added: “Unscrupulous employers have also declined to pay national minimum wage rates, often for staff working in food production or agricultural parts of the economy. This is potentially a criminal offence.”
He denied that zero-hour contracts would automatically lead bosses to “deliberately or negligently cut corners” on health and safety or food standards.
However, he said such models, which often involve the use of migrant workers whose first language was not English and who work irregular hours, did raise other issues. “Such contract types do give rise to challenges in respect of ensuring that training is adequate and staff behave appropriately, which are the main areas of risk.”
Controversy over zero-hour food industry contracts surfaced again earlier this week in a Channel 4 Dispatches documentary, which illustrated the uncertainties faced by staff on such contracts.
Women’s rights group Fawcett Society published survey results last week indicating that one in three low-paid women in London are on zero-hours contracts, versus one in eight in the rest of the UK.
‘Financial insecurity and hardship’
Launching the study, Dr Eva Neitzert, deputy ceo at the Fawcett Society, said: “With zero-hours contracts there is no guarantee of work at all, so this can be a route into financial insecurity and hardship. The women in our sample were all earning below £7.44 per hour. Yet, even 28% were not getting as many shifts as they would ideally like.”
The food and hospitality industry contains the greatest proportion of workers on zero-hours contracts – more than a quarter of the total industry workforce – according to the latest Office for National Statistics (ONS) data.
Responses to the latest ONS survey, canvassing 5,000 businesses over a fortnight in January, indicated at least 1.4M workers were on such contracts. A further 1.3M were unaccounted for because they were not working during the survey. But a survey for trades union Unite suggests the figure could be as high as 5.5M.
In a submission to BIS’s consultation on zero-hours contracts, Unite calls for them to be banned, stating: “Zero-hour contracts are used to trap workers in low paid and insecure work, creating social exclusion, poverty and misery for a growing class of people.”
One respondent to Unite’s survey on zero-hours contracts said: “There is no job security, and we are all unhappy about it.” Another said: “We are being forced this month to move over to zero-hour contracts or face dismissal.”
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