The issue of Zero Hours Contracts has come of age during the present election campaign. The issue started off as just one arrow in Labour’s “Cost of Living” quiver, but has since assumed a more central role in the party’s electoral rhetoric.
A Zero Hours Contract is not a legal construct, but rather an informal term for a working arrangement where a worker is assigned shifts ad hoc and has no contractual obligation to work a minimum number of hours.
This kind of arrangement is as old as remunerative employment itself however it’s use has hitherto primarily been pragmatic and generally restricted to where it was to the mutual benefit to both parties: either because the workers valued their flexibility or because the particular industry relied on piecemeal work.
In the past four years however, their “exploitative” use has burgeoned inexorably. This has been due mainly to a cultural rather than a legal shift, and one which owes its ascent to the concurrence of two events.
The first was that having spent 13 years on the opposition benches, the Conservative party crossed the House with an express mandate to cut the deficit and, in particular, to cut the welfare budget.
The Tories were also keen—having spent 13 years watching New Labour court big business—to reassert themselves as the true party of commerce.
The second event was that for the second time in as many years the economy contracted in consecutive quarters, fulfilling the foreboded ‘double dip recession’ prophecy. This was only corrected eventually by a stuttering and inauspicious recovery.
Recessions trim down a workforce, whether through redundancies or non-replacement of labour lost to natural wastage. When growth does return, companies that shed employees can start with a clean slate to rethink and restructure their workforce.
The appeal to a company of restructuring their workforce using Zero Hours workers is obvious: staffing costs can become hyper-responsive to demand, either by sending staff home or calling more staff in depending on how busy they are.
Further, in law, a contract without a minimum hours provision is not a contract of employment; the worker therefore foregoes a number of employment rights, including the right to not be unfairly dismissed and the right to a redundancy payment.
There are also benefits to the Government of companies using Zero Hours workers: despite potentially not receiving any income, Zero Hours workers are nominally considered employed, reducing both the unemployment rate and the value of out-of-work benefits payable.
The effect on the workers however can be both adverse and far reaching: in the immediacy, a worker who has her shifts routinely cancelled or cut short may have problems meeting her ongoing expenses; in the longer term, the lack of job security will leave her unable to financially plan properly and mortgage providers will only lend with extreme trepidation.
If the proliferation of exploitative Zero Hours Contracts continues, we will create a generation of individuals who will work their entire lives yet still find themselves locked out of the property owning economy.
While the examples of mutually beneficial use may mitigate against an outright ban on Zero Hours arrangements, they should not be used to mask the scale of the problem.
The election pledges advanced by Labour do represent progress, although their practical impact may be limited and the party is yet to put much flesh on the bones of the proposed right to demand a Fixed Hours Contract after 12 weeks of continuous employment.
Neither is it difficult to see the tricks employers could use to sidestep this; many companies already require workers to take every twelfth week as a holiday to dip the risk of paying notice.
Many Zero Hours workers are also understandable anxious that tighter regulation might make their precarious working arrangements even less tenable.
The change needed to address the current imbalance may therefore be as much a cultural one as a legal one: strong, progressive governance is needed to end the open season on worker’s rights. Until these challenges are met, we will continue to see more and more people suspended in economic and social purgatory; their next wage dependent on whether or not they get that phone call.
Further, irrespective of the legislative framework, while the Tribunal fees remain in place, the poorest workers will continue to be priced out of the sole enforcement vehicle.
More legislation is also needed to make sure employers are forced to put their actual names on a worker’s payslips.