Zero hours contracts are back in the news again today. Ed Miliband will make a speech this afternoon setting out how Labour plans to tackle what is perceived by many to be a growing problem.
Over the last twelve months, zero hours contracts have become something of a “bogeyman” in the press, ranking alongside pay day loans as one of the scourges on society, blamed for everything that is wrong in the world of work today. All the main political parties agree that the use of these contracts should be reviewed, but they are all reluctant to commit to specific action. Until now.
The problem is that, although most people accept that there are many ways in which zero hours contracts can be misused, for example, by insisting that workers cannot work for any other employer, or cancelling shifts at short notice, some businesses believe that, used properly, they are a genuine flexible resource to enable employers to manage their work as and when required.
These differing views are clearly summed up in some of the comments quoted in the news reports today. Chukka Umunna, the Shadow Business Secretary states that Labour will tackle these “exploitative” contracts, saying “one man’s flexibility is another’s insecurity”. However, the Institute of Directors believe that “zero-hours contracts are one small part of a much broader flexible labour market” and that this flexibility is necessary to enable the economy to recover.
So what does Labour propose to do?
The proposals set out three main protections for workers:
• Giving workers the right to demand a fixed-hours contract when they’ve worked regular hours over six months for the same employer.
• Requiring employers to give workers a fixed-hours contract automatically when they’ve worked regular hours for more than a year – unless they chose to opt out.
• Providing protection for workers to stop employers forcing them to be available all hours and insisting they can’t work for others or cancelling shifts at short notice by providing compensation.
Unfortunately for Ed Miliband, from a purely political viewpoint, these proposals probably fall between two stools. Some Labour supporters will say that 12 months is too long to have to live with such conditions; the opposing view is that these proposals will limit employers’ freedom and increase fixed overheads, thereby slowing the economy again.
Arguably, the proposals being put forward today are not far-reaching and do not deserve the furore that will no doubt be created in the press. If zero hours contracts are used properly, i.e. as a flexible resource from time to time, not to provide a regular, consistent workforce, then these protections will not be required and neither worker nor employer will suffer as a result. If, on the other hand, employers find that they are using workers for regular hours for six months or more, then this is clear evidence that what is required is not a flexible arrangement and in fact, a different sort of contract should be used.
It remains to be seen whether employers generally will agree with this view. Evidence suggests that the sectors which are most reliant on zero hours contracts include the Leisure Industry, Health, and Education sectors. If zero hours are going to be a primary battle ground for the political parties in the next general election, maybe now is the time for those sectors to get their houses in order to ensure that their contracts really do meet their requirements and zero hours contracts are not just a lazy way of avoiding addressing the real issues in the workforce.
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