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It’s not all secure beyond zero hours

  1. Sports Direct
    Employment Law Clinic

    Employment Law Clinic UKBF Big Shot Full Member - Verified Business

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    Zero-hours contracts have been a hotly debate topic on UK Business Forums, with members split on whether they provide a useful tool for businesses that require flexibility and feeling like it’s unfair to workers. Here Karl Limpert, founder of Employment Law Clinic and active UKBF member gives an ardent argument in their defence.

    It’s not unusual to hear the scorn that zero-hour contracts receive, employment contracts that apparently emanate from the lowest bowels of a malevolent HR Officer’s mind, a person whose sole intent in life (or at least their employment) was to exploit any others that may enjoy the trappings and benefits of a paid, regular job.

    These grievances were aired at the highest levels of politics back in June, when Jeremy Corbyn used his opening question at Prime Minister’s Question Time to voice concerns (which are widely shared) about these contracts:

    “…the insecurity and exploitation of zero-hours contracts. Philip wrote to me this week with his concerns and said that the scandalous scourge of zero-hours contracts is blighting the lives of many already low-paid people. Will the Prime Minister do what some other European countries have done and ban exploitative zero-hours contracts here?”

    Certainty – or lack thereof

    The biggest complaint about zero-hours contracts is that a worker simply doesn’t know what wages to expect from one week to the next.

    Perhaps, as is one argument made against zero-hours contracts, employers should always forecast their needs, and it’s only bad employers that don’t do this, relying instead on zero-hour contracts.

    That argument fails when an established guest house or seaside retailer considers their historical trade at different times of the year and, suddenly, in early September 2016 we encounter the hottest day of the year. Imagine a cleaner in a seaside guest house or a sales assistant in an ice cream parlour that normally has a few welcome, but perhaps sporadic, hours work each week; suddenly they’re offered a big bonus – lots of extra work, extra hours, nothing that could really have been foreseen. Is that a bad thing? Something that should be banned because the weather and business opportunities suddenly take an up-turn?

    False sense of security

    One of the big arguments made against zero-hour contracts is that they provide no sense of security, the worker having no idea from one week to the next what they might be paid.

    I think this is utter tosh! Let’s take the example of Sports Direct, as that’s the company most in the spotlight for zero-hours contracts…

    Worker #1 has a zero-hours contract; a steady income, with regular work offered and accepted, but no certainties. They don’t assume anything and plan ahead for all future commitments, saving where necessary for a family holiday, and then paying for this when they have enough saved.

    Worker #2 has a regular contract, with a regular income that means they can borrow from Wonky Loans to book their holiday early. Suddenly, with the spotlight on Sports Direct’s employment practices, business takes a down-turn. Worker #2, with all his confidence of having a regular income, is placed on a temporary lay-off – no work for the next six weeks and no pay either (there is a right to a minimal amount, but this is very low – £130 in a three-month period) - until the media-dust settles.

    Worker #1 is in a very sound position; worker #2 is fending off calls from Wonky Loans or perhaps is unable to pay-off their holiday at all and loses his deposit.

    Forecasts and predictions

    Professionals failed to forecast the general election and then the EU referendum. No employer can be entirely sure that there will be a need for each of their employees or workers every day they expect to employ them, and zero-hours contracts offer opportunities (as well as risks) for both parties. But the risks are better understood for workers on zero-hours contracts than an unexpected and probably unknown possibility (as this right is usually tucked away in the terms of a well written employment contract – not something you’ll find from the templates on gov.uk or from ACAS) that a temporary lay-off might equally bring.

    The bottom line

    For most staff purportedly on zero-hour contracts the bottom line on their weekly wage slip won’t change (but in practice, these workers probably aren’t on zero-hour contracts and could test the same in an employment tribunal – just because a document suggests it’s a zero-hours contract doesn’t make it so).

    For staff that are on genuine zero-hours contracts (and their employers that use them) there are pros and cons. They offer no certainty to either party, but they are flexible enough to fit into the needs of a flexible employment relationship that can sometimes be unpredictable.

    Zero-hour contracts are not a bad thing. Their exploitation might be, but that is something that can be addressed within the current systems – employment tribunals; they should not be banned outright.

    Employment contracts should be issued based on the needs, expectations and purpose. Templates offer no benefits or security, and beyond meeting the legal requirements are simply impractical, and employers should avoid them at all cost. You don’t need to spend a lot, but a little advice and investment will bode well for the future – particularly if you’re open to being a zero-hours employer.

  2. Kat Haylock

    Kat Haylock Community Editor Administrator

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    Informative & excellently written, Karl! It's great to finally read a piece on zero-hour contracts that presents a different argument. I'll make a mental note to stay away from Wonky Loans :D
    Posted: Sep 28, 2016 By: Kat Haylock Member since: Jul 11, 2016