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Zero hours contracts - common ground?

Last week's furore around zero hours contracts was intense.  On behalf of the CBI, Director General John Cridland said "These contracts play a vital role as a way of keeping people in employment. If

Last week's furore around zero hours contracts was intense.  On behalf of the CBI, Director General John Cridland said "These contracts play a vital role as a way of keeping people in employment. If we hadn't had this flexible working when the economy contracted, unemployment would have topped 3m – and it didn’t it went to 2.5m".  Meanwhile Dave Prentis, General Secretary of UNISON was quoted as saying: "UNISON would like to see the use of these contracts banned – at the very least the Government needs an official investigation to confirm the true scale of the problem."     


It may be possible to find some common ground.  Zero hours contracts are likely to benefit some workers for whom flexibility is important.  Such workers are however, likely to be a minority of the million or so workers the Chartered Institute of Personnel and Development now estimate are on such contracts.  It seems likely that most workers on zero hours contracts have not chosen that manner of working.  Given a free choice most might well choose a pattern of working with more predictable hours and hence pay.  But in a free market economy this is a matter of supply and demand.  There may be some merit in the argument that zero hours arrangements have provided a vital safety valve for some businesses as a way of reducing costs whilst retaining access to labour more directly aligned with business fluctuations.  As and when the economy picks up, the demand for more permanent employees is likely to increase, reducing both the need for zero hours arrangements and the supply of workers who have no choice but to offer themselves for work through such arrangements.


What is clear is the need for a more informed debate.  For many employers the use of agencies to supply staff to supplement a directly employed workforce will have made the use of zero hours arrangements less obvious.  It is also unhelpful that "zero hours" is a colloquial term which may cover a variety of arrangements.  In some the individuals will be employees of an agency with greater rights than those who are purportedly employed by no one and merely supplied by an agency.  It is also unhelpful to focus on the contractual nature of the arrangement rather than how it operates in practice.  Whilst a zero hours contract may contain flexibility to provide no work, in practice many people working on zero hours contracts may have long periods of regular hours with only short periods between assignments where no hours are offered to them.


Most right thinking employers will want to see a legal framework which allows for some flexibility but avoids leaving workers so insecure that they do not know from week to week whether they will have any money coming in to buy food and pay bills.  The Government should consider the call for a more detailed analysis of the use of zero hours contracts than we have had to date to identify any areas where workers might be being exploited and then to consider whether any form of regulation is necessary or desirable.  In the meantime, Andy Sawford's private members Bill to prohibit the use of zero hours employment contracts is expected to have its second reading debate on 24 January 2014 and might now attract a little more attention.

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