Time to Legislate Against Zero-hour Contracts?

Time to Legislate Against Zero-hour Contracts?

richard_mcmunn_entrepreneurWith the economy still struggling to find its feet after the recent global recession, numerous individuals are facing extreme difficulty in finding stable and secure employment. This has pushed the balance of control further over to the employer’s side, with many taking advantage of the flexibility that zero-hour contracts offer.

What Are Zero-hour Contracts?

Fundamentally, zero-hour contracts are flexi-contracts (largely from the employer’s side), which offer employment without any guarantee of set hours. Neither the employer nor the employee are obliged to offer or accept hours, although the employee does commit to being on-call, should they be required. 

They are controversial as they offer employers full control over staff and create a situation whereby reprimand and reward can apply unnecessary pressure on employees.  This can force them to accept poor and often unsustainable working conditions, in a bid to secure hours and salary. The design of the contracts also means that employers often have no responsibility to cover sick, holiday or redundancy pay.

Where Are Zero-hour Contracts Active?

It has recently been reported that over a million people, or 4% of the workforce, are on zero-hour contracts in the UK. The industries most commonly employing such contracts are the hotels and restaurants sector, health and education. The biggest exponents tend to be large chains, such as McDonalds, Subway, JD Wetherspoon and Cineworld.

A recent documentary heavily criticised Amazon UK for their treatment of staff on zero-hour contracts, suggesting that they were being treated as “human robots”.

They Can Be Used Well

There are, however, other organisations who are using zero-hour contracts in a slightly more balanced fashion. The National trust, for example, employs a large number of staff on zero-hour contracts, but affords them the same rights as permanent employees.

Flexibility Does Suit Some

In defence of zero-hour contracts, some do suggest that the flexibility they offer can be of benefit for a wide range of job seekers. Such individuals include students and semi-retirees. The counter-argument to this, however, is that flexibility isn’t really applicable in cases where refusal to work a shift results in the long absence of hours. Indeed, the common argument discusses whether zero-hour contracts are offering flexibility or catalysing servitude.

The issue of being given hours at short notice, which many companies are guilty of, also makes it difficult for parents. The imperativeness of accepting all hours offered means that many will end up spending more on last-minute child care. It also makes it difficult, if not impossible, to combine one zero-hour contract with a second income stream.

Employment statistics

 

What Are the Politicians Saying?

Vince Cable, the UK’s Business Secretary, has recently spoken out against zero-hour contracts, suggesting that they are being exploited by many employers. With Unions demanding that they be banned completely, the government will decide in September whether or not they will consider specific proposals.

Although the official word seems to suggest that there is some benefit to this form of contract, the opposition is adamant that more robust guidelines are required if these benefits are to be realised. Vince Cable also admitted that he is not sure that many companies are 100% clear on the nature of zero-hour contracts and this can lead to confusion, which ultimately impacts the employee.

Fluctuating Income

One of the other negative components of such a contract is the fluctuating nature of the salary. Anyone who has freelanced will already be aware that without contracted work and a guaranteed income, financial planning is complicated massively. It can make it extremely difficult with financial commitments, such as education, holidays, mortgages, rent etc., if your salary is constantly fluctuating. Although this can be overcome with sound financial planning, it certainly does complicate matters.

Stress and Insecurity

On top of the aforementioned issues with zero-hour contracts, with regards to the obligation many feel in accepting all hours offered to them, there is also an increased level of psychological stress, due to a lack of security. Even contracted employees face an increased level of stress when it comes to employment; currently, with many companies making large numbers redundant. When this is coupled with an increasingly competitive jobs market, insecurity is a through line, impacting the majority of workers in the UK.

In Conclusion

When it comes to employment, fundamentally it is the government’s job to ensure that the UK population are afforded fair working conditions. This not only includes fair pay and benefits – both of which are questionable under zero-hour contracts – but also security and stability. Employment is a major part of anyone’s life and, therefore, it is essential for health and wellbeing that structures exist to protect employees. 

There may not be the necessity for zero-hour contracts to be banned completely, as they can be beneficial in certain instances. Rather, they need to be managed and structured in such a way that both workers and human rights are protected.