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.
Category Archives: Work Related Posts
Posts on work topics that aren’t specifically HR related – they may be on economics, world events or something in the news at the time!
15 years – Always Innovating, Never Standing Still
Welcome to the new look Ariadne Associates website. If this is your first visit, please have a look round to find out what we offer. This is the first blog post on the new site – other posts are archived from our old site, and include a range of HR tips for SME such as this one, ones that caused some discussion among the HR community like this and a few miscellaneous work-related musings like this
As June 2014 sees the 15th Anniversary of Ariadne Associates (yes, we were founded in the last century) this post is more reflective and self referential than usual. But looking back over the last 15 years it’s worth recording that we’ve
- Worked with over 100 companies and charities (more if you include work done as an associate)
- Kept a core base of clients for over 10 years (in fact, we still work with our first ever client)
- Issued over 1000 invoices (and got paid for virtually all of them!)
- Worked in highly regulated environments – an airline, childcare, and social care
- Worked in arts and media – 2 TV production companies, a theatre, and a video editing company
- Worked in manufacturing – industrial glass production, metal fabrication and vehicle production, for example
- Worked with professional services – marketing, venture capital, surveyors and accountants
- Supported companies at the cutting edge of technology and those who work in a more traditional way
- Worked with charities, family run firms, joint ventures between pubic and private sectors, partnerships, social enterprises and private limited companies.
- Helped organisations of widely differing size – our biggest client employed 375 staff while the smallest is just recruiting their first employee.
And what do they all have in common? – people. It doesn’t matter what the organisation actually does, or its environment – their success is determined by having the right people (whether your business defines that as productive, efficient, entrepreneurial or technically competent) and failure by not having the right people (again, whether your business defines that as obstructive, incapable, or simply too many of them). Whatever the sector, people adapt to the culture and rules and the advice we give is tailored to that.
So if you’re looking for support for your business, we’d be more than happy to help – just contact us. And since self-praise is no recommendation, have a look at our Testimonials.
Not Just there for the Nasty Things in Life
Originally posted April 2014
When I arrived at a client recently, the receptionist greeted me cheerily with “hello Simon, nice to see you. I suppose this means we’ve got a staff problem!”
Now it’s true that for many smaller businesses, an “HR issue” means a problem with an employee – whether it’s sickness, disciplinary, work performance or something else. And it’s also true that in a small business these individual issues take on a much greater significance than in the large corporate world. Making sure they are handled correctly is important.
But it’s worth remembering that HR is “not just there for the nasty things in life”. Taking positive HR initiatives can help your business to grow and be more successful. For example in recent months I’ve worked with organisations to:
- Support new first line managers to understand and develop their managerial roles
- Integrate their HR systems into their quality management, allowing them to tender against much larger competitors
- Review recruitment processes, enabling them to attract better quality candidates
- Review their pay and benefits package, helping them to retain key staff.
- Run team building sessions for work teams that weren’t gelling
So while I’m always happy to troubleshoot for a client, it’s very satisfying to help a business succeed by developing the people it employs.
If you’d like more information, please don’t hesitate to drop me an email or give me a ring. And as Ariadne Associates are accredited with both Growth Vouchers and Big Assist, as well as being Knowsley Council’s approved HR provider for its Business Growth programme, you may be able to get support with the costs
The Balance of Power
Originally posted March 2014
The sudden death of union leader Bob Crow this week has thrust industrial relations back into the business and political spotlight. Both political allies and foes immediately began the process of mythologising him (as an aside, the way in which we continue to elevate the recently dead to saints and gods in the manner of the ancient Greeks and mediaeval Catholic church would make an interesting blog post, but this isn’t it)
The general consensus is that Bob Crow was a successful union leader because he took his personal principles into his professional life and refused to compromise them. I never met Mr Crow – though I have in the past dealt with his union, the RMT – but the most frequently cited evidence for his success is the position of his members working on London Underground. That to me suggests that the key to his achievements was not his personal values (though I’ve no doubt he had them) but his understanding of power relationships in work.
London Underground is a closed rail network (or rather a series of them) which operates separately from the rest of the UK’s railways. It is relied on by millions of Londoners to carry them to and from work. Consequently, a withdrawal of labour can cause massive inconvenience, and brings media and political pressure onto the organisation. The unions representing the workers in that business are therefore in a very strong position to maintain and improve conditions for their members because they have power on their side.
Contrast this with last year’s Grangemouth dispute (about which I blogged here). In that scenario, all the power was with the management who could and did threaten to close the plant if their demands weren’t agreed to. Interestingly, the resolution of the dispute – which involves £130m of investment in the plant – has arguably pushed the power back towards the workforce.
There are also historical examples – the success of the miner’s strikes in the early 1970s, compared with their failure in the mid 1980s, is simply that power had shifted from worker to employer.
Power relationships don’t always have to involve unions. An individual employee with key technical, managerial or other skills can always extract a better deal from a company because the consequences of losing that individual have a damaging effect on the business overall. And in some areas of professional services, it’s not uncommon for an entire team to move from Company A to company B.
There’s a tendency these days for HR people to assume that all the power is with the employer, and that their task is to “align” employees with the employer’s objectives. But effective HR people need to understand where the power lies within the organisation – and plan and manage accordingly. Bob Crow is a good example of how to do that.
Machiavelli and Macho Management
Originally posted October 2013
As a young HR professional, I cut my teeth on what were known in those days as “industrial relations”, and spent many a happy hour (well, many an hour anyway) locked in negotiations with trade unions. Big industrial disputes (like big hair and shoulder pads) went out of fashion by the end of the 1980s, so it was with a mixture of professional interest and nostalgia that I watched how the Grangemouth dispute last week played out. (If you missed the story, the background is here).
Depending on your viewpoint, it was a classic case of old-fashioned politically motivated trade unions attempting to resist change by an employer, or bully-boy tactics by a company using a pretext to drive down workers terms and conditions. Either way – and there seems to have been elements of both extremes at work – the dispute reached a head when Ineos announced that the plant would close with the loss of 800 jobs; the next day the union accepted the company proposals; and the following day the company said the plant would in fact stay open and that £300m would be invested in it.
A resounding defeat for the unions and a victory for macho management? I don’t think so. A wise old manager once told me “even if you’ve won your point, always give the union something to take back to their members. Trying to humiliate them will just lead to resentment and they’ll look for an opportunity to gain revenge at some later date”. In fact that view goes all the way back to Machiavelli, who – although he advised Princes to kill or banish their opponents, since being merciful and magnanimous in victory would lead to a constant fear of plots and rivalry – also counselled against trying to rule people (which in this case means the employees) by fear to the point of hatred.
So I’m going to indulge in a bit of crystal-ball gazing.
Grangemouth will reopen with the staff on worse terms and different work patterns, and Ineos will begin its investment. But as staff begin to resent the things they conceded “at gunpoint” the plant will be characterised for the next few years by “low level” industrial disputes, not necessarily formal action or even make the news but those which take up a lot of managerial time and effort. At some point, when the union feels on much stronger ground (probably after the investment is completed, or the economy is stronger), there’ll be another big dispute. Ineos will then be faced with a choice: play the “nuclear” card of threatening to shut the plant again (and risk looking like the boy who cried wolf); back down to the union demands; or decide to cut their losses and sell a troublesome plant to a competitor. Whichever they chose, their significant investment won’t yield much of a return, and I wouldn’t fancy being one of their shareholders over the next few years.*
(*Note – this blog is not intended as financial advice. Shares in Ineos may go up, down, loop the loop or defy the ground. Past performance is not a guide to the future, as any football fan will tell you).