Are zero hour contracts vital for small businesses? Or is it plain exploitation?

Are zero hour contracts vital for small businesses? Or is it plain exploitation?

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Date02 Dec 2013
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Posted ByAdmin
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In light of Labour party leader Ed Miliband’s call for the government to ban zero hours contracts that require workers to be on call all day without any guarantee of work, a group of small businesses owners have come forward at a roundtable event organised by Kronos, a workforce management solutions company, and said that zero-hours contracts are absolutely vital to the long-term success of their business. 

Alan McCappin, Practice manager at Bradleys, is surprised at this talk of banning zero-hours contracts and doesn’t think it will lead to any significant changes as there is currently no legal provision that prohibits the use of zero-hour contracts. Zero hour contracts have been criticized because of their lack of reciprocity between an employer and employee, with employees having to be usually available for ‘piece work’ or ‘on call’ work. This means that employers are not obliged to provide work for the employee, nor does it oblige the employee to accept the work offered.  The employee agrees to be available for work as and when the employer needs them, so that no particular number of hours or times of work are specified.

Pam Sidhu, employment law expert at The Wilkes Partnership, said, “It is extremely unlikely to ban zero-hours contracts entirely, as the use of these contracts can be justified in industries where business demand is unpredictable, such as hospitality where 'casual workers' have been used for many years."

The talk of banning such contracts is in direct contradiction with a new survey that found zero-hour workers to be happier with their work-life balance than the average worker. The study carried out by Chartered Institute for Personnel Development (CIPD) says that almost 50% of the 1000 zero-hour workers were satisfied with their job against 27% who were dissatisfied.

According to a CIPD spokesman, "The use of zero-hours contracts in the UK economy has been underestimated, oversimplified and, in some cases, unfairly demonised," he said. "Our research shows the majority of people employed on these contracts are satisfied with their jobs."

But he admitted that employers exploited the contracts and there was a need to improve practice in the use of zero-hours contracts, for instance, the lack of notice many zero-hours staff receive when work is cancelled.

These findings come on the heel of another survey carried out in August by CIPD which said that close to a million people are employed under zero-hour contracts - a figure based on responses from more than 1,000 employers.

Alan McCappin says, “With shortage of staff, zero hours contracts are an essential part of today’s economy, however, we need to encourage best practices and ensure that employers don’t squeeze staff to up their profits. I agree with CIPD when they say that instead of restricting the use of zero-hour contracts through regulation, we should focus our understanding on how to use the contracts within the law. Moreover, it’s the right thing that government is reviewing this area and will hopefully allow people on zero hour contracts to find other work.”