Member Article

Zero hours is a cause for concern

The recent news that over a million workers in the UK are on so-called “zero hours contracts” is a cause of concern. This figure, four times the national estimate, does not also encompass those who are on very low hours contracts.

The fact that the CIPD indicates that only 14% of people do not get a sufficient number of hours, is itself appalling, that one in six workers don’t get treated fairly or can make ends meet and the rest have highly unpredictable employment arrangements.

In 1847, Karl Marx, wrote in Das Kapital with reference to the use of a surplus labour force: “It is the absolute interest of every capitalist to press a given quantity of labour out of a smaller, rather than a greater number of labourers”. Originally, this “reserve army” of labour were unemployed people. However, in a technologically advanced age, the training, contracting and retention of people on low or no hours contracts allows opportunities for people to be only a phone call away from being functional in the organisation.

I’m not by nature Marxist, however, Marx did have a lot to say about the interplay between those who run organisations and the behaviours of the rest of the population. For one, he predicted the growth of population in these conditions in an unsustainable way. Additionally, this phenomena was couched in the exploitation of the workforce.

“What exploitation?” one might ask. After all, it’s jobs and better than people sitting at home. Whether it is unemployment, being unemployable or, as in the case of zero or low hours workers, being “underemployed”, there are serious social consequences for employment now and in the future. Let’s look at the plight of some of these zero or low hours workers. They are expected to be on call in many cases, often on a continuous basis. This makes ordinary family arrangements difficult and the work unpredictable and intrusive in their lifestyles.

If they are sick, they have the benefits of no hours or part-time hours staff. They do not require overtime payments until they have worked a 37 hour week. Sickness is no cost consequence to the company. This would appear to be offering employment with an advantageous state subsidy. Guaranteed contracted part-time and full-time work at least gives people predictable lifestyles. True, many people now craft their lifestyles around part-time work. This suits large-scale employers who do not need staff on a full-time basis, but can increase output on an as-and-when basis.

The problem is that many of these people remain on benefits, away from the realisation or expectation of full-time work. As a consequence, they live in a hinterland between benefits dependency and real wage-based autonomy in our community.

Glass “half full”: this could be seen as getting people to work who otherwise couldn’t and getting the economy moving. Glass “half empty”: large-scale employers are seen to be taking advantage of the benefits system in order that people do not have to be given reasonable working conditions and predictable income flows. State benefits, such as tax credits incentivise part-time working and the employers reap the benefit, rather than contributing to the economy overall by offering regularised, ideally full-time work for those who want it.

This effectively means that large companies can scale their workforce on the minimum hours basis, allowing increased output at the drop of a hat. Governments get a payoff by a manipulated drop in the unemployment figures when in fact the rest of us are offering a state subsidy to business. It is not like the situation that exists in some small company which can only afford a few hours a week of a part-time member of staff. It is a deliberate strategy to improve the bottom line based upon employment by organisations who are well able to socially contribute in better ways than this.

Once again, the larger organisations with the financial might are able to exploit these systems, while smaller businesses struggling to grow lose out and cannot avail themselves of this Government hand-out. Once again, as with tax and other factors, we see the large corporates exploiting the system of unenlightened Governments who simply do not get how organisations really behave or how to support smaller businesses effectively so that we have true competition, diversity and stimulation within our economy. Larger organisations have to start to look at the bottom line and balance this against its social consequence of trading within our communities.

These organisations often have impressive corporate social responsibility policies. They often give out help to the community by way of preferred themed projects, rather than actually looking at serious approaches to labour and how they address fair and equitable employment as reasonable employers in the community.

The truth is out there, let the ethical employers step forward and any governments out there, who purport to have a serious approach to stimulating the economy by growing small businesses, to act like they have a clue. Perhaps they should all read Marx. No, not as an alternative political doctrine to adopt, but as a contrasting view that challenges the consensus of poorly framed public policy and those mercenary self-interested organisations whose perceptions of real social conscience are sullied by the needs for continuously incremental profits.

David Cliff is Managing Director of Gedanken and Vice Chairman of the Institute of Directors’ County Durham and Sunderland Committee.

This was posted in Bdaily's Members' News section by David Cliff .