You will no doubt be aware of the great debate in the last few weeks concerning the zero-hour contract. Just to explain how it works. A zero-hour contract is a contract of employment which (while meeting the terms of the Employment Rights Act 1996) creates an ‘on call’ agreement between employer and employee. It does not oblige the employer to provide work or the employee to accept the work offered.
It is estimated that over 1 million of Britain’s workforce are in a zero-hour contract agreement, and a recent study by the REC (Recruitment & Employment Confederation) showed that one quarter of companies in the UK are using it. In fact as I write this the ONS has agreed to revise the way it calculates the number of zero hour workers, believing the 1 million figure is too low.
So why is it so controversial? Well with big employers such as JD Wetherspoon, McDonalds, and Sports Direct (who incidentally have 90% of staff on zero-hour) we are talking about a big proportion of the working economy working on these flexible terms. It’s particularly popular in certain industries such as hospitality, retail, education and the healthcare sectors.
On face value it seems like an easy option for employers to have flexibility in their work force without having to offer anything more than a job paid by the hour.
As with any terms they are subject to exploitation; there are reports that some employers for example use the contracts as a tool to reprimand staff. There are also arguments that they will not create a sustainable economy but in the current economy of job insecurity the other side of the coin is the flexibility they provide that benefits both the worker and the boss. And as with any contract if that suits you it suits you.
The matter is currently being debated in Parliament so we wait to see what Vince Cable’s decision will be in considering closer regulation of the contracts.