Zero Hour Contracts

Zero hour contracts are creating a lot of news at the moment with everyone from the Frances O'Grady, (the TUC general secretary) to Vince Cable (Business Secretary) making comments about their concerns that the contracts are both unfair and potentially abused by employers.

It is somewhat ironic that Mr Cable voices concerns over these contracts when it is estimated that over 270 government staff are tied into these contracts and over 100,000 NHS staff also being tied in.

So, what is the problem with these contracts?

The principle is that an employee goes through the normal application, interview and acceptance procedure. At that stage (maybe sooner) they will be told that they will be employed under a zero hour contract. This means that the employer is under no contractual duty to pay them a salary unless hours are worked and the employer will only offer hours if they are available. No hours are guaranteed to the employee.

Effectively, being employed under a zero hours contract is similar to being on call but without getting paid. An employee has to be available at short notice so may be in a position that they cannot commit to any other employment and if they refuse work at short notice it is possible the employer will overlook them next time work is available.

As they stand, a zero hours contract provides the employer with the knowledge that should the workload increase, they can immediately call upon a workforce. Also, the employer knows that should the workload decrease, then they will not be running at a loss due to paying wages to staff who are not fully occupied.
Flexibility, especially when recovering from a recession, is vitally important for an employer. The zero hours contract provides this flexibility and assists in making an employer competitive and hopefully, successful. The employee however gets the rough deal. This is why a zero hours contract needs to provide flexibility both ways. For example, if the contract stated the employer had to give say, 1 months notice to the employee, at least the employee could source alternative temporary work elsewhere. Currently however, zero hours contracts are weighted in favour of the employer.

If the government does take the bold decision to legislate on zero hour contracts (which is unlikely as no one is forced to enter into one) then they will not, in my opinion be banned - they will simply be made fairer towards the employee, giving minimum notice to the employee if the employer requires their services.

It will be interesting to see how the current situation develops, I feel however that it will drop out of the news and be forgotten before the end of Autumn. The Government wish for the economy to improve, they want businesses to flourish and to this end, it will be a difficult decision to try and stop employers using these contracts.