04 OCT 2017

Zero hours contracts

A flexible labour market is important for business and works for many in giving greater opportunity to live their lives as they choose. However, it is clear that new business models are pushing the bounds of union acceptance. The TUC has rather mistakenly said that "zero-hours contracts allow bosses to treat workers like disposable labour." But as I found out, zero hours contracts give the employee control over their working.

The growth of the so-called 'gig economy', and the rise in non-standard working practices has raised challenges. I believe that these zero hours contracts have a part to play in a modern, flexible labour market and it is important to make sure that those benefitting from the flexibility of these contracts are not exploited by unscrupulous employers.

The Office of National Statistics (ONS) produces figures on zero hour contracts. This is part of the Labour Force Survey and it gathers data from workers, rather than employers. The latest figures available are for the period April – June 2017. This data set indicated that 2.8% of all people in employment are on zero hours contracts. It is worth just repeating that: only 2.8% of all people in employment are on zero hours contracts. They are not distorting the unemployment figures. There is no understated figure of unemployment. It is worth noting that the framework used by the ONS has wide international acceptance, including by the International Labour Organisation (ILO).

Such flexibility is often desired by the employees. The problem in the past has been where people taking zero hours contracts have also had to enter exclusivity clauses with employers. I am pleased that action has already been taken and that in 2015 the Government legislated to ban exploitative zero hours contracts meaning it is now illegal for employers to include exclusivity clauses in zero-hour contracts. This gives people the freedom to look for and take other work opportunities and have more control over their work hours and income.

However, concerned at what had been reported in the media of late, I decided to find out more for myself. I recently visited my local branch of McDonald's to meet with managers and staff to discuss the issue.

The first thing I discovered is that McDonald's do not employ people on zero hours contracts. Whilst this may have been the case in the past, employees are now offered a contract for a minimum 4 hours a week, 16 hours a week or 30 hours a week. Employees previously on an hourly paid flexible zero hours contract have been offered the opportunity to change to one of these contracts. The terms and conditions for the guaranteed hours contracts are the same pro rata. In the franchise that I visited which has 10 restaurants, they gave all employees the option to move to a guaranteed hours contract. Out of 780 employees on hourly paid contracts only 29 chose to move to a guaranteed hours contract. The remainder preferred to stay on a flexible hours contract.

I talked to some of the staff at the branch about their hours. I spoke with a team leader who was on a salaried contract which means a full time job but flexible hours with other team leaders. She was content with the hours and enjoyed variety. One young man was on a 4 hour per week contract and did not want to increase this minimum although he actually worked more most weeks. He said that as a young person he was able to work to earn enough money to live his life and liked the flexibility so that he could do things socially. Another young man was at college. He liked the 4 hour a week contract as it gave him flexibility to do more hours in the vacations and fewer hours at exam time.

I also talked with Area Managers and the Operations Manager as well as the Franchisee. With a 24 hour operation and different peaks in demand depending on the day of the week, school holiday periods, Bank Holidays and other such occasions the need for flexibility is critical to the operation.

In October 2016 the Government commissioned a review to look at whether employment rules have kept pace with changes in the economy, especially for those who do not have traditional employment relationships. Zero hours contracts were included in this. The report of the review was published in July and the Government is now looking at the report which will inform future strategy.

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