What is a zero hours contract?
A zero hours contract is a contract in which an employee agrees to be available for work but has no guarantee of a fixed number of hours per week. The employer is under no obligation to provide work and the employee is under no obligation to take any hours offered. Payment is according to number of hours worked.
According to the Work Foundation, which surveyed those on zero hour contracts, about 40% were in favour, 40% against and the rest indifferent.
Ian Brinkley, senior economic adviser The Work Foundation said: “The better the job then the more likely they are to like the zero hours because they have bargaining power. People with little bargaining power have to accept what they get.”
So are zero hours contracts as bad as we’re told?
Zero Hours Contracts
Andy Prendergast, senior organiser for south east London and Kent GMB
People like to have stability – they like to have shift patterns, they like to know there’s enough money at the end of the month to pay the rent and unfortunately they are living in a precarious state.
We’re moving back to a position like the docks in the 19th century when the workforce would turn up and put their hands in the air and some of them would be lucky and some wouldn’t and that ends with corruption, that ends with favouritism and it ends with workforce being disempowered and abused.
In places like Wetherspoons or McDonald’s you have 80-90% of your staff on zero hours contracts. This does not work for 80-90% of the staff. They have no guarantee of earnings, no guarantee of work and it puts them in a very vulnerable position.
We have members in some distribution companies who will only be told they haven’t got a shift when they’re on their way to work. That involves the employee having to pay for childcare or having to pay for public transport and it simply gives no stability whatsoever.
Whereas once you would have people guaranteed a level of hours they are now often zero hours or on a pitiful number of hours which they then have to make up.
That creates instability and fear because it allows an employer to use “unofficial sanctions”.
So if you have someone who has committed a disciplinary act you have to take action. If they’re on a zero hours contract then people often find that their shifts have just disappeared. It’s difficult to take any action because technically nothing has happened. That puts the employer in the driving seat.
Colin Stanbridge, CEO, London Chamber of Commerce and Industry
That is a picture of Victorian London that I don’t recognise. Let’s just get into perspective. I would concede that if an employer misuses zero hours contracts, that is wrong, that shouldn’t happen.
But let’s be clear – the last figures we had showed that 76% of companies didn’t even know about zero hours contracts. Of the rest of them they only had a small number on these contracts.
We’re talking about a small number of companies and of the companies we asked only about 7% were saying that they were going to increase the number.
Flexibility of workforce is one of the great benefits that London has and that has worked in favour of the fact that we were able to get out of the recession in a quick way and in most case the relationship between the employers and employees is extremely good and these contracts work out to the benefit of both sides.
Yes, there may well be areas where it’s wrong but there’s a danger of over-emphasising this as if it were somehow a plague that has swept over London.
Any good employer would want to make sure their workforce, even if they’re on zero hours contracts, is not disgruntled. I am sure that McDonald’s doesn’t want a workforce that is disgruntled. It has to work on both sides and in many cases it does work on both sides.
As debated in front of the London Assembly economy committee