Half of hospitality businesses make use of zero hour contracts

By Sophie Witts contact

- Last updated on GMT

Half of hospitality businesses make use of zero hour contracts

Related tags: Employment

Fifty-three per cent of hospitality businesses make use of zero-hour contracts, according to the latest figures from the Office for National Statistics (ONS).

The hospitality industry has the highest proportion of businesses using No Guaranteed Hours Contracts (NGHC’s) compared to any other sector, and between 23-25 per cent of people working in the industry report being on NGHC's.

Zero-hour contracts remain a contentious issue within the industry, where there are a large number of seasonal employees.

While TUC general secretary Frances O'Grady said the findings “sum up what has gone wrong in the modern workplace”, a representative from the Association of Licensed Multiple Retailers (ALMR) told BigHospitality that the flexibility offered by NGHC's was critical for the hospitality sector.

She said: “Many of our employees are young, in full time education or semi-retired and enjoy the freedom these contracts provide as they often combine work with study or other activities.”

Across all industries those most likely to be on NGHC's are women (55 per cent) or in full-time education (17 per cent).

Workers are also more likely to be aged 16-24 (34 per cent) or 65 and over (6 per cent).

Working hours

The ONS survey found that across all sectors 34 per cent of people on NGHC’s want to work more hours compared with 13 per cent of other people.

2014 Travel & Tourism survey by business advisors MHA​ found that a majority of hospitality staff on zero-hour contracts were working regularly, with three quarters frequently working more than 40 hours per week.

A representative from the ALMR said: “Payroll costs account for nearly a quarter of turnover in licensed premises and, according to the ALMR’s employment survey, average hourly wages are in excess of the National Minimum Wage.

“This is certainly a sector willing to invest in its employees and we provide a great range of career paths for young and aspiring people.”

Exclusivity clauses

Martin Couchman, deputy chief executive of the British Hospitality Association (BHA) said that the issue around NGHC’s was the need for them to be flexible for both employer and employee.

The government banned exclusivity clauses on zero hour contracts​ in 2014, and Business Secretary Vince Cable is currently piloting the legislation through parliament.

Couchman said: “The industry supports mutually agreed flexible working opportunities, so long as it's a non-exclusive relationship and the employee has the freedom of choice. There is pretty much agreement on all sides that exclusivity clauses, about to be banned, should be banned because they can restrict workers from having a second job.”

Some of the UK companies known to use zero-hour contracts include McDonalds, JD Wetherspoon, Subway, The Spirit Pub Company and Burger King.

The report’s findings were based on an ONS survey carried out in the fortnight beginning 11 August 2014 and a Labour Force survey from October to December 2014.

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