1 in 3 insecure workers face £3000 annual hit – government assessment reveals

• TUC hits back at scaremongering and “reductive” debate around figures on zero-hours contracts
• The union body says too often actual costs to workers are ignored in favour of handwringing over hypothetical costs to bad employers
• New prime minister should ignore the noise and crack on with delivering new rights in full, says TUC

The TUC has hit back at scaremongering from some business organisations on guaranteed hours and said the case for giving insecure workers security at work is “overwhelming”. 

The union body says that too often in this debate the actual cost to workers is ignored – and the hypothetical costs to employers reliant on poor working practices dominate. 

The government’s impact assessment on rights to guaranteed hours contracts revealed that 1 in 3 insecure workers report an average loss of more than £3,000 per year – or £250 over four weeks - due to recent issues at work linked to insecurity of hours and income.

This massive financial hit relates to losses such as payments already made or committed for travel and childcare, as well as the loss of expected earnings. 

A separate TUC poll shows the significant hit of insecure work to incomes.

• Nearly two-thirds of those in insecure work said they often or sometimes struggled to meet their basic living costs due to not being offered enough hours
• Over half of all respondents said they were not paid the last time their hours were cancelled. This rose to two-thirds among workers on zero-hours contracts.

Contrary to what the TUC calls “cynical” claims that guaranteed hours would have a negative impact on people out of work, an MHCLG survey also reveals that the right to guaranteed hours could make it easier for around 4 in 10 people not in work to return to work.

Burden on workers

The TUC says the debate has been reductive and overwhelmingly focused on the potential cost to business who want to continue to operate insecure contracts, instead of the actual cost to workers. 

For example, the focus has been on the highest estimates in a wide range of costs - from £350m to £2.9bn- which is based on the assumption that businesses will continue to cancel shifts at short or no notice, a practice the legislation aims to stop.

The union body also says the benefits to both workers and businesses who want to compete on a level playing field are often overlooked.

Wider benefits

The TUC says the wider benefits of the Employment Rights Act would deliver a £10bn boost to the economy.

18 million workers will benefit directly from better working conditions and improved job security – especially women, young workers and disabled people

Poor-quality work, including insecure hours and low pay, is shown to be one of the primary factors driving poor mental health amongst young people – one of the risk factors for becoming NEET (not in education, employment and training).

And the reforms will boost living standards, improve health and wellbeing and help more people stay in work.

They will also deliver savings to the taxpayer as a result of reduction in benefits paid out because of low-paid insecure work. 

As well as rights to guaranteed hours, key benefits being delivered for workers include: 

• Sick pay reforms mean up to 1.3m low paid employees will now be able to take paid time off when they’re sick.  This will particularly benefit lower paid women.
• Unpaid holiday pay worth hundreds of millions of pounds will be recovered for workers by the new Fair Work Agency. 
• Unfair dismissal protection extended to over 6 million workers who have been with their employer less than two years but more than six months.
• Improved protection from dismissal for pregnant women and new mothers with reductions to unfair dismissals for pregnant women and mums returning from Maternity Leave.
• New bereavement leave for around 2.7 million people each year. 
• 30,000 more fathers or partners to get paternity leave and 1.5 million parents to gain the right to unpaid parental leave from day one.

The government’s own impact assessment acknowledges these wider benefits and says its own assessment is “partial”.

TUC General Secretary Paul Nowak said: 

“These new rights will give workers up and down the country more security at work and a better standard of living. Let’s call out attempts to water down these rights for what they are: blatant scaremongering - and it needs to stop.

“We are talking about low-paid precarious workers who don’t know how much they’ll be earning from week to week or the hours they’ll be working. 

“The government’s own analysis shows that 1 in 3 face a typical financial hit of £3000 a year because of this constant insecurity. That’s a huge cost for workers and their families. 

“But it’s not just workers that lose out because of insecurity – it's our economy at large too. 

“The Employment Rights Act would deliver a £10bn boost to the economy through improved staff wellbeing, greater productivity and better living standards boosting demand.

“So good employers have nothing to fear from these new rights. This will level the playing field for them – and stop decent employers who do right by their staff being undercut by the bad.

“That’s why the new prime minister must ignore the noise and put an end to exploitative zero hours contracts by delivering these new rights to guaranteed hours in full.”

On the debate on costs, Paul added:

“Too often, the debate on cracking down on insecure work focuses on hypothetical business costs and ignores the real costs to workers. 

“That has been borne out this week with an utterly reductive debate. 

“Just look at the total focus on the upper end of estimates of cost, which shouldn’t even come to pass if the legislation does as intended and stops short-notice cancellation of shifts.”