Firms could be forced to pay more for zero-hour jobs

Companies who employ workers on zero-hours contracts could be forced to pay a premium rate for short-notice work, the Government’s employment practice adviser has said.

Matthew Taylor, the former head of Tony Blair’s policy unit appointed by Theresa May last October to lead a review into labour rights, said the proposal could stop ‘lazy’ employers from shifting all risks onto workers.

In an interview with the Financial Times, Taylor said that employers would be incentivised to guarantee more hours of work in advance if they had to pay workers a higher minimum wage for work that had not been agreed in advance.

‘We’ve been hearing … about people in the social care sector who are told, “Be ready to leave the house at seven in the morning”, then a phone call [comes to say] “No we haven’t any work for you today”,’ Taylor said. 

He added: ‘I think we can encourage employers to be a bit less lazy about transferring risk. Even if it means (an employer) offers 15 hours a week rather than one hour, at least that’s 15 hours that I can know I’m going to be able to pay my mortgage.’

Taylor’s proposal comes as zero-hour contracts, under which staff are not guaranteed work and often receive short notice of whatever hours they get, have proliferated in recent years. 

The number of people employed on zero-hours contracts has grown by 101,000 to hit 910,000 over the past year, now representing 2.8 per cent of all people in employment, according to the latest available figures from the Office for National Statistics.  

Taylor, who is also the chief executive of the Royal Society of Arts, said his proposal could be an answer to the ‘one-sided’ flexibility that employers demand from workers.

But he added that his proposal was ‘still up for debate’ and that one of the drawbacks could be to create different minimum wages, making it more confusing for workers.

Taylor has been brought in to review employment practices in the light of mounting concerns that workers, especially those of the so-called gig economy – a term coined to describe new kinds of casual work – are increasingly taking on more risks which were once shouldered by businesses. 

Under the gig economy system, workers are paid for the specific jobs – ‘gigs’ – they undertake rather than the hours that they work. These tasks could be anything from transport or delivery to odd jobs or beauty treatments.

This way of working is uncharted territory in terms of employment rights. Companies like Uber and Deliveroo, which have been involved in legal battles recently, are accused of circumventing the law by classifying their workers as self-employed independent contractors.

These ‘self-employment’ models have been criticised as a means of avoiding employment rights. This is because self-employed contractors do not have the same protections and basic rights as company employee, for example in terms of holiday pay, sick pay and the national minimum wage. 

Independent Workers’ Union of Great Britain (IWGB) general secretary Jason Moyer-Lee said: ‘The overwhelming problem of employment rights in the so-called gig economy is the lack of enforcement of existing law.

‘If the Taylor Review wants to crack down on unlawful behaviour in the sector it needs to recommend that government enforce the law and needs to make it easier for claimants to take their employers to tribunal by eliminating tribunal fees.

‘The Review should also recommend increasing the rights associated with worker status.’