Calls to prohibit zero hours contracts misunderstand the issue. Flexible employment is here to stay, because it works for both organisations and individuals
There is nothing inherently wrong or exploitative about zero hours contracts, although you wouldn’t realise that from some of the hyperbolic language coming from certain trade unions this week. The call from some Labour MPs to ban zero hours contracts is ridiculous, and makes as much sense as calling for a ban on part-time work.
There seems to be a certain level of misunderstanding about the rights and protections workers have in these situations. To be clear, employees on zero hours contracts have all the same statutory rights to holiday pay, sick pay and the national minimum wage as any other employee. When managed properly, with good communication between hirer and employee, they can be beneficial for both the business and the worker.
Zero hours contracts allow employers to respond to peaks and troughs in demand that exist in many sectors such as driving, hospitality, tutoring and retail. Domiciliary care is a sector that’s seeing increasing use of these contracts, largely because of current public procurement practices.
The UK’s flexible labour market is the envy of the world and despite what some commentators want to suggest, it seems unlikely we will ever return to a full-time, full-employment economy. There are two key reasons for this: competition within industry and individual choice.
The opportunity to vary the hours they work can be good for people who don’t want to commit to a daily nine-to-five routine: students, people with caring responsibilities, those with other part-time jobs or who want to reduce their hours on their journey to retirement.
Zero hours contracts have often been conflated with the lower-skilled end of the labour market, but this is not always the case. Musicians, guest lecturers and journalists are also roles where zero hours contracts are used to accommodate an individual’s other commitments.
These arrangements are used through the public and voluntary sector as well as by private businesses with the obvious example being the NHS Bank. Our figures suggest more than a quarter of all employers use these contracts to some extent.
Research from the Chartered Institute of Personnel and Development and the Resolution Foundation found that, on average, employees on zero hours contracts work 19 to 21 hours a week, the equivalent of a three-day week. The foundation also found that only 18% of workers on these contracts were actively looking for other work, which suggests the vast majority are at least content with the hours and pay they are receiving.
Some of the examples publicised recently by the minority of workers unhappy with their situations reflect poor management practice, they don’t reveal anything fundamental about the validity of zero hours contracts. Employers who treat their workers badly will lose good employees, and rightly so.
Of course, it’s not right if people are going into work only to be sent home immediately, or live in fear of losing out on hours if they don’t agree to last minute, unreasonable requests from their bosses.
Finally, it’s also important that this debate is seen in context. The Office for National Statistics is the only source of official data on these kinds of contracts and last week they updated their figures to show 250,000 people are currently employed in this way. That’s less than one percent of the UK’s working population.
Even if the CIPD’s estimate is true that one million people are employed in this way, that would still represent just three percent of the 29 million people employed in the UK.
Flexible employment is here to stay, because it’s what organisations and individuals feel works for them. Contract work, freelancing, temping and self-employment are all options that have helped keep unemployment lower than many expected during the recent recession.
Zero hours contracts are a small, but legitimate, part of that picture of work in modern Britain.
Kevin Green is CEO of the Recruitment and Employment Confederation, the professional body for the UK’s recruitment industry
