Zero Hours Contracts – The Debate in Summary:
- Zero hours contracts have sparked debate due to concerns about exploitation and lack of benefits, with over a million workers affected.
- They offer flexibility for businesses with fluctuating staffing needs and can be beneficial for certain employees like students or retirees.
- The CIPD advocate for reviewing these contracts to ensure fair treatment and prevent abuse, emphasizing the need for a balance between flexibility and employee rights.
Zero hours are nothing new these days – especially given the rise of the so-called ‘gig economy’.
A poll published by CIPD estimates that over one million workers are now employed under the terms of zero hours contracts – significantly more than previous government estimates. But, concerns continue to linger around whether they’re a more flexible approach to work, or simply exploitative.
The case against zero hours contracts…
Critics claim that some unscrupulous organisations are not using the contracts in the spirit in which they’re intended and are exploiting vulnerable staff and evading their responsibilities.
Under a zero hours contract, the employer is not obliged to provide work and can effectively have people ‘on standby’ to work only when they need them. Employees on zero hours contracts often get no holiday or sick pay, either. And unfortunately, they’re often regarded unfavourably if they don’t take up the offer of work at short notice, even though they are under no obligation to do so.
It’s been mooted that in difficult economic times, employees have little choice but to accept these contracts. Some also argue it’s the beginning of a slippery slope which will see employment rights in the UK gradually being eroded.
Of course not all employers are using zero hours contracts inappropriately…
The case for zero hour contracts
Many believe they can be a really useful mechanism for fast-growing businesses with unpredictable staffing needs. They’re also incredibly useful for companies that need flexibility to cope with seasonal peaks and troughs.
There are plenty of employees who welcome the flexibility they bring too – older workers who want to keep their hand in by doing occasional part-time work, for example, or students who are combining work with their studies.
Also, despite zero hour contracts not offering typical job stability, the CIPD reports that many feel they help maintain a positive work-life balance. And, their research has revealed that those in this type of employment are less likely to say their work has a negative impact on their physical or mental health
Clearly, there are both positives and negatives to this type of employment. The CIPD has called for a closer look at the definition of a zero hours contract and guidance on what makes for good and bad practice. And, it appear an outright ban on zero hours contracts that had been mooted has also been put on the back burner by the main political parties: reinforcing the fact they are now a staple of modern working.
In the meantime, what are the issues your business should be considering if it already employs – or is considering employing – people on zero hours contracts? Let’s take a look at a couple of key considerations….
Ensuring fairness with flexibility
The first is to make sure you are getting the balance right between being fair to employees, while also building a flexible workforce that meets your resourcing needs. Most forward-looking employers would want, for example, to offer a guaranteed minimum of hours and basic entitlement to benefits such as holiday or sick pay in order to keep staff engaged.
Research has shown that in companies where levels of employee engagement are high, there is a significant increase in areas like innovation, productivity and staff retention. People are unlikely to want to delight customers, bring their best selves to work or go the extra mile if they feel the implicit contract between employer and employee (I will work hard if I can see you appreciate my efforts and are giving something in return) has been broken.
Open communications
Open communication is also key. If employees are clear about what level of work is likely to be available, how much is guaranteed and what benefits are on the table, they’re able to enter the agreement with realistic expectations. And, there’s less likelihood of disillusionment or resentment further down the line.
It’s also important to consider whether the business is actually managing staff resources in the most efficient way. In a small rapidly growing business, staff needs can sometimes be difficult to predict, but technology is now available to help medium and larger size businesses predict trends in work flow and manage flexible work patterns more effectively. If a business is managing its resourcing well, there should really be no need to have large numbers of staff on zero hours contracts.
If nothing else, maybe the growing debate around zero hours contracts will ‘nudge’ the government to look more closely at some of the red tape that still surrounds employment practice, so that companies are more confident about the best way to build flexible workforces that meet their needs without eroding employees rights or falling foul of the law.
Erika Lucas
Writer and Communications Consultant
Erika Lucas is a writer and communications consultant with a special interest in HR, leadership, management and personal development. Her career has spanned journalism and PR, with previous roles in regional press, BBC Radio, PR consultancy, charities and business schools.
