Zero hours contracts

19/08/2013  -  10.02

Professor Roger Seifert, Professor of Industrial Relations

Zero hours contracts – nothing new under the sun

In the Victorian era there were sweatshops, child labour, few worker rights, and casual employment with no guaranteed income.

We view this with horror as a sign of gross inequality, ruthless exploitation, and as bad times in which the rich and powerful were able to maintain their idle privilege through laws, customs, and a deeply religious conservatism where everyone was born into and knew their place.

Scratch the surface of our modern world and we can find signs that progress has not been as spectacular as we like to believe. New CIPD research released last week suggests that there could be about one million zero hours workers in the UK.

According to ACAS: ‘The term 'zero hours' is not defined in legislation, but is generally understood to be a employment contract between an employer and a worker, which means the employer is not obliged to provide the worker with any minimum working hours, and the worker is not obliged to accept any of the hours offered.’

The argument from employers is that zero hours' contracts can be used to provide a flexible workforce to meet a temporary or changeable need for staff. Examples may include a need for workers to cover unexpected or last-minute events; temporary staff shortages; and on-call/bank work.

While in a small number of cases employers may use this form of contract as a safeguard for business continuity, the truth is more that the system is abused by companies seeking to exploit the high rates of unemployment and low incomes alongside benefit cuts.

The IFS figures released last week show that UK workers real income fell faster than all others bar three countries in the EU, at an average cut of nearly 6% since 2010.

Put simply, zero hours contracts cover a range of arrangements that mean workers have no guaranteed weekly hours or income, and are only being paid for the hours that they do work.

Generally, employers use zero hours contracts to cut wages, avoid holiday pay, pensions, and other benefits enjoyed by employees and agency staff. Workers are also unable to take on other work, as they are obliged to be available for work at the whim of the employer.

The rise in zero hours contracts along with falling real wages, more part-time work, fewer rights at work, and high unemployment all adds up to a culture of exploitation.

This return to Victorian values of government by grandee, exploitation, and a rising gap between the rich and poor is most likely to result in the same outcomes of social deprivation, public disorder, and gross inequality.

Zero hours contracts add to that and is no solution to the desperate need for full-time work with decent living wages.