Lack of clarity confuses argument over zero-hours contracts

By Hannah Jordan, Friday 13 September 2013

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The row over the so called zero-hours contract (ZHC) has gained traction in recent weeks, not least thanks to a survey published by Unite on 8 September, ahead of the TUC Congress in Bournemouth last week.

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The study, carried out by research firm Mass1, claims that an estimated 5.5m people in the UK may be employed on ZHCs. The figure dwarfs other recent estimates from the CIPD and the Office of National Statistics, which put the number at around 1m last month and 250,000 in Q2 of 2012, respectively.

Unite’s headline figures are pretty damning, with the union finding that out of its sample of 5,000 people, 70% had not wanted to be put on ZHCs and 87% would not remain on them if given the choice.

But the argument from both the CIPD and Unite is not about whether ZHCs should be banned, a move that some MPs are pushing for, it is about creating a clearer definition of the ‘zero-hour worker’ and implementing greater employment rights.

People employed under ZHCs are termed ‘workers’ rather than employees and have no guaranteed minimum hours, although they must agree to be available for work as and when they are needed, and they are paid only for the hours they work.

Effectively this provides employers with a pool of ‘casual’ workers, who are not entitled to maternity leave, redundancy or TUPE rights, who have no protection against unfair dismissal and to whom the employer has no legal duty to pay holiday or sickness pay.

This of course can leave workers open to exploitation by unscrupulous employers. But as highlighted in a House of Commons Library briefing published last week, there is uncertainty over whether a person on a ZHC is a worker or an employee, depending on how the contract operates in practice and the regularity of hours offered and worked.

In turn, this ambiguity could leave an employer open to a tribunal if a regular ZHC worker claimed, for example, that they had been unfairly dismissed because they were no longer needed.

No studies have so far given comprehensive data on what specific industries most commonly adopt ZHCs, perhaps because, as PrintWeek found, not many companies are willing to openly discuss it.

But BPIF chief executive Kathy Woodward says they have always been used to an extent in print, to meet certain needs.

"It started in finishing traditionally, where there are peak working situations and runs can be unpredictable. But now it has expanded, so you also find IT and management consultants in the same situation. We also use flexible working in the BPIF. It’s just a different way of working that should suit both parties.

"Rather than thinking of a master- slave situation people should think of it as a consultant-contractor relationship. It’s a different perspective."

"Although," she adds, "if zero-hours is the only work someone can get, that is obviously very hard if they want permanent job security."

Roy Kingston, Wyndeham’s chief operating officer, says "confused" commentary that has featured in the press recently has depicted ZHCs as "some kind of slavery", but that in many cases, they suit changing work and life structures.

"No-one is holding a gun to anyone’s head; if people want zero-hours they take them, if they don’t, they don’t," he says. "We’ve found it’s a win-win. A benefit to us is that we get a steady stream of people who understand what we do. And for them, they are putting themselves in the shop window so that if a permanent position arises, we will offer it to them. They say no most of the time though."

Kingston says that zero-hours contract workers make up less than 5% of Wyndeham’s workforce at any time, with openings in both skilled and unskilled areas.

"Quite often they are mature employees who have had a career in print but they don’t want to work full-time. The web offset business is very seasonal. We have periods of high-volume production followed by quiet periods in some areas, which simply doesn’t work with full-time employees. But with zero-hours contracts it works," he adds.

Another industry employer, who wishes to remain anonymous, and whose workforce includes about 1% on ZHCs, says they can work both for and against an employer.

"If employers are feeling nervous about taking on permanent staff due to economic uncertainty and wouldn’t be offering jobs otherwise, then it is good way for them to put their foot in the water with no ongoing liabilities for fixed costs. But the one down-side is that the employee is free to do what they want, so you can lose good people to others if they maybe want a permanent contract that you can’t offer.

"It would be nice to have everyone employed in full-time positions but that has never happened and there are now a huge variety of contracts that suit different employers and workers," he adds.

Whatever the pros and cons, with the Department for Business Innovation and Skills agreeing in July to undertake an informal review of the situation, we can expect more headlines in the coming months.
But as the Work Foundation’s Ian Brinkley points out in his report Flexibility or Insecurity? Exploring the rise in Zero Hours Contracts, published last month, despite the various surveys, we still do not know why more employers are adopting them. Neither do we know whether people are agreeing to them out of choice or out of necessity.

As such, calls to ban the contracts are misplaced, he says, and knee-jerk reactions would be unwise.


OPINION

The UK’s workforce deserves to be treated better than this

Paul Finegan, national officer for graphical, paper and media, Unite
Unite has had success in rolling back the tide of zero-hours contracts (ZHCs) in the printing industry. However, there is no room for complacency and the union won’t tolerate the exploitation of workers with these pernicious contracts.

In the past, we have been able to put an end to them by negotiating proper flexible working arrangements. One example was with a major magazine printer, which agreed to take on zero-hours workers as flexible bindery workers with guaranteed minimum hours and available for work at peak times. It was the sensible solution.

The existence of ZHCs may be denied and brushed under the carpet by employers, but Unite believes they are a very real, growing and menacing aspect of employees’ working lives.

ZHCs create a throwaway workforce  and, in this respect, the printing industry is no different from the care sector or those working in retail or leisure sectors.

They are a one-way street to unfairness, where employers bear no risk and avoid sick pay, holiday pay and overtime.

Unite has undertaken the biggest survey of ‘insecure’ workers of recent times, from which we estimate that about 5.5m workers could be on ZHCs.

Very few said that they "enjoyed" the flexibility that coalition ministers trumpet as one of the alleged main benefits. The vast majority said they wanted decent, secure employment – a framework around which they can build their lives and plan for the future for themselves and their families.

This should worry us all. We cannot build a confident, thriving nation if we allow millions to be treated as disposable workers.

ZHCs are not a rarity. They are not a help up the employment ladder, they are a trap of low wages, anxiety and utter uncertainty. Britain’s workers deserve better than this.


READER REACTION
Are zero-hours contracts a fair way to hire temporary staff?

Dani Novick, managing director, Mercury Search & Selection
"For people who are out of work, the opportunity of a zero-hours contract is a job opportunity, and for employers they offer a great deal of flexibility. So there is potential for a win-win situation. It’s easy to say they are exploitative, but that is only the case if there is a glut of talent; employers can only push the terms down where they have the choice. But for roles where there is a talent shortage, such as finishing or digital, it is a disadvantage to the employer because skilled people will go to whoever is offering the best terms."

Alan Padbury, managing director, Westdale Press
"I don’t think it’s a fair way to hire anybody. I think it’s abysmal. If you’re going to employ someone, it should be based on a certain number of hours and a certain amount of money. We wouldn’t entertain it. My son signed up to a zero-hours arrangement during his sixth-form summer holiday and never got called in at all. Vulnerable people probably think it’s better to do this than nothing. I’m surprised it’s legal, I really am."

George Thompson, director, Harrison Scott
"We are always looking for as many positive aspects of a client’s business as possible to highlight to the potential candidate. High-calibre candidates these days request detailed and historical information in regards to the potential employer. Take any three vacancies: If two had continental shifts and one was zero-hours, even for a small percentage of the workforce, it would make that option less attractive for the candidate. We may end up with a two-tier classification where the best candidates choose companies who don’t have zero hours and that would damage firms using zero-hours."

 

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