Member Article

Zero-Hour Contracts – Should we bring morality into business?

Up to 1 million staff work on zero-hour contracts in the UK, offering no guaranteed set hours or income.

Recently, these have become a controversial issue due to the scale of use since the financial crisis took hold and also their peculiarity to the UK.

Although these contracts are still rare in both Europe and the US, it is estimated that 20% of all jobs created since 2008 in the UK are offered on these terms (which may not include sick pay, holidays or other typical benefits).

The benefits to employers are clear. Katie Hopkins, famous for appearing on BBC1’s ‘The Apprentice’, has stated that: “Zero-hour contracts create an innate sense of competition that makes people hungry for work. People perform better on a zero-hour contract. Every hour they deliver for that business is another hour’s work they may gain later in the week.”

So, these contracts undoubtedly offer businesses a great deal of agility to react to changing workloads and they also eliminate the potential additional costs of overtime working and enable employers to reduce the salary burden during quiet periods.

Politically, it appears to have significant value as well. Since the start of 2008, the unemployment figure has risen from 1.62 million to 2.56 million, due to the credit crunch and the slow pace of the recovery. However, zero-hour contacts are still classed as employment, even if they can potentially represent underemployment. Therefore, they are not counted in these figures.

Many of the UK public (including some politicians and employers) consider that zero-hour contracts exploit staff in order to maximise profits.

If there is plenty of work available within an organisation and the employees are able to be flexible and work longer hours, then the system does work well. This typically lends itself to those in the 16-24 age range with fewer financial commitments and no children. Due to the current high levels of youth unemployment (21.4% in this age range), the prospect of any work at all is welcome to many.

But for others, it can be highly detrimental. Staff are essentially ‘on call’ and, in many cases, not allowed to find additional employment when not at work and are expected to be available at any time. Furthermore, there is anecdotal evidence that those staff unable to work at short-notice can be actively penalised through the reduction of future hours. The more flexible the staff member, the more hours they are likely to work.

Daniel Younger, founder of CY Partners specialist recruitment, commented: “At CY Partners, we do not offer zero-hour contracts. We do however, make a lot of successful placements on temporary contracts – some can be as short as 1-2 weeks whilst others can last 2 years and beyond. In a lot of cases, staff have been offered permanent roles due to their outstanding performance.

“It’s also important to note that with the Agency Workers Directive (implemented in 2011) any agency worker on a temporary contract for more than 12 weeks is already entitled to equal treatment as a permanent member of staff.

“Contract or temporary worker contracts work well for us and we believe they are fairer to workers. Through this type of contract people have guaranteed work, even if it is shortterm, there is usually a long-term aim of gaining permanent employment, which we help with.

“The question of zero-hour contracts is ultimately a moral one. Should staff salaries be viewed as a simple business cost to be minimised by any means necessary in order to maximise profits? Is fear of losing income really the best motivator for staff to be flexible and work hard?

“In a time where rises in living costs have continually outstripped pay rises, the moral approach should be to demonstrate loyalty to staff in return for their flexibility and hard work, rather than relying on the desperation of staff simply to ‘find work, any work.’.”

This was posted in Bdaily's Members' News section by CY Partners .