Young jobseekers – including graduates – face losing their benefits if they refuse to take zero-hours contract roles, under new plans being drawn up by the government. Those who turn down the controversial contracts could lose their benefits for 13 weeks on the first occasion, 26 weeks on the second occasion and 156 weeks on the third occasion.

The Guardian has reported that the change is part of plans for the government’s new universal credit benefits system. It comes despite fears that the controversial contracts are increasingly tying hundreds of thousands of UK workers into insecure and low paid employment. Until now, people claiming JSA have not been required to apply for zero-hours contract vacancies and have not faced penalties for turning them down.

As reported on Graduate Fog last week, the Office for National Statistics revealed that there are 1.4 million zero-hours contracts currently in use, whereby workers have no guaranteed minimum number of hours of work or pay but are required to be on standby should their employer need them.

Research also showed that more than one in 10 employers are using such contracts, which are disproportionately likely to be offered young jobseekers, women and people over 65. The figure rises to almost half of all employers in the tourism, catering and food sector, industries often associated with ‘stop-gap’ temp jobs or shift work taken by graduates seeking better-paid work long-term.

The change in policy under universal credit was revealed in a letter from Esther McVey, an employment minister, who confirmed that, under the new system, JobCentre “coaches” would be able to “mandate to zero-hours contracts”, although they would have discretion about considering whether a role was suitable.

And a response to a freedom of information request to the Department for Work and Pensions (DWP) published on its website reveals: “We expect claimants to do all they reasonably can to look for and move into paid work. If a claimant turns down a particular vacancy (including zero-hours contract jobs) a sanction may be applied, but we will look into the circumstances of the case and consider whether they had a good reason.”

Asked about the issue by the Guardian, the DWP said jobseekers would not be required to take a zero-hours contract that tied them in exclusively to work for a single employer. They insisted that the change has been made possible because universal credit will automatically adjust the level of benefits someone receives depending on the number of hours they work. This means claimants should not face periods without the correct benefits when their earnings fluctuate or they change job.

However, critics raised concerns that the new policy will force people into uncertain employment and restrict the ability of claimants to seek better work while still placing a burden on many to increase their hours. Labour MP Sheila Gilmore said she was concerned about the situation because JobCentre decision makers already do not appear to be exercising enough discretion before applying sanctions under the old regime. She said:

“While I don’t object to the principle of either universal credit or zero-hours contracts, I am concerned about this policy change. I also fear that if people are required to take jobs with zero-hours contracts, they could be prevented from taking training courses or applying for other jobs that might lead to more stable and sustainable employment in the long term.”

And Andy Sawford, a shadow minister who has pushed for reforms of the contracts with his zero-hours bill in parliament, also expressed concern about the change, as universal credit will require many people on low hours to try to increase their work. Those below a “conditionality earnings threshold” — normally 35 hours at the minimum wage — may be asked to “carry out relevant actions” to raise their earnings, or again face sanctions. Speaking to the Guardian, he said:

“How can you commit to training, undertake a proper job search or agree to participate in interviews when you are on a zero-hours contract and may be required to work at any time? Requiring people to take zero-hour jobs is a big change from the past. It will create further insecurity for many of the lowest paid people.”

But a spokesman for the DWP insisted that claimants would not be out-of-pocket under the new system – and that zero-hours contracts could lead to long-term opportunities:

“As now, if there’s a good reason someone can’t just take a particular job they won’t be sanctioned. But it is right that people do everything they can to find work and that we support them to build up their working hours and earnings. The average zero-hours contract provides 25 hours of work a week — and can lead to long-term opportunities.

“Universal credit payments will adjust automatically depending on the hours a person works to ensure that people whose hours may change are financially supported and do not face the hassle and bureaucracy of switching their benefit claims.”

Labour has promised to crack down on abuses of zero-hours contracts, with leader Ed Miliband saying their use has reached “epidemic” proportions in some industries. He wants to see workers with irregular shifts and pay getting a contract with fixed hours if they have worked regularly for the same employer for a year. The TUC has also expressed worry that they are “no longer confined to the fringe of the job market”.



What do you think of the government’s plans to remove JSA for those who refuse to take zero-hours contracts? Is a zero-hours contract better than nothing? Or should jobseekers be allowed to hold out for more permanent, secure work?

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