Zero Hours Contracts – the symptom, not the problem

Every so often people get into a “moral panic” and become fixated on a “bad thing”, about which “something” must be done. In HR/Employment Law the current “bad thing” is zero hours’ contracts.
These are employment contracts that don’t provided any guarantee to the employee of any number of hours per week. Hours can vary and in some cases the individual may not be required in any particular week – hence the Zero Hours name.
Various politicians have in recent weeks queued up to suggest reforms – from banning “exclusivity clauses” (i.e. ones which prevent an employee on a zero hours contract from working for someone else) to forcing employers to give a guaranteed number of hours after the individual has worked for them for 12 months. As a number of employment lawyers and other commentators have noted, both of these are easy for unscrupulous employers to get round if they want to.
It’s worth remembering that current estimates in the UK of people work under zero hours contracts vary from 600000 to 1.4 million. Out of a total workforce of 30 million, even at the upper end that’s less than 5%. And not all of those are unhappy with the arrangement – some surveys show that the majority who have them are happy to work under a “zero hours” contract.
As is often the case, those who are critical of these contracts are focusing on the symptom not the cause. There are two issues. Firstly, in a labour market during a recession, employers have plenty of staff to choose from so can drive costs down (wages can’t fall below minimum wage, so terms and conditions go instead). Once the economy picks up, individuals will move to more secure employment if they wish and employers will either face constant turnover of staff or have to improve their offering. It’s all about the balance of power in the employment relationship.
And secondly, our expectations as consumers are forcing employers to adopt these more flexible practices. Fancy a book from Amazon for next day delivery? Moan about the fact your train is cancelled because the driver is off sick? Expect not to wait in Costa for your coffee even though 20 of you have turned up at once? Companies don’t have banks of staff hanging around on the “off-chance” that there might be a surge in demand, but our expectation that our order will be fulfilled immediately means they need to be able to call on people at short notice for varying hours.
One very good example of this is a charity I’ve worked with who provide a personal shopper service for the elderly and housebound. They don’t know if Mrs Smith will need her groceries on a Tuesday or a Thursday, or not at all in a particular week. Hence the staff are employed under zero hours contracts by the charity.
Whatever the legal employment framework, “bad” employers will always bend the rules to their advantage and exploit individuals. One of the current mantras in HR is “don’t make rules for the 95% of decent employees based on the bad behaviour of 5%”. The same should apply to the legal restrictions on employers.

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