There’s been a lot of drama concerning zero hours contracts recently, with the press really jumping on the bandwagon of persecuting employers who use them, particularly with respect to the more high profile examples, such as Sports Direct and even Buckingham Palace. Media reports have estimated that there are more than a million workers in the UK who are affected by zero hours contracts, suggesting that this rather controversial employment contract is being used far more widely than was originally thought.
Essentially, the contracts are used to hire staff but provide no guarantee of work or salary each week. These types of agreements rarely offer any benefits such as sick pay or holiday benefits and in most cases employees must obtain permission from an employer before they are allowed to go and look for work elsewhere. Figures from a survey conducted by the Chartered Institute of Personnel and Development found that nearly 40% of those working under a zero hours contract were working up to 30 hours a week and would describe themselves as being employed on a full time basis.
There is considerable differentiation between the structure of zero hours contracts, which can vary from employer to employer. It is this element of the contract in particular that has led to calls for the contracts to be reviewed to try and establish what is good and bad practice under a zero hours contract, what this type of agreement should contain and what the general structure should be. The fact that the contracts are being used by such a large number of employers in the UK, many of which are very high profile, such as JD Wetherspoon (which employs some 24,000 of its staff under the zero hours contract) and Buckingham Palace (which uses the contracts for its 350 summer workers) is what has prompted the calls for review. There is also the issue that, as more than a million workers are affected, this is a substantial proportion of the UK workforce, and there are considerations of personal wellbeing, employment rights and earning capacity to be taken into account for all those workers – rather than this being a small issue that was affecting only a few.
Some unions have indicated that they feel staff have often been pressured into signing zero hours contracts and that there is no choice but to sign the contract or simply not be given the work – which in the middle of a recession is really no choice at all. However, there are some employers that have been using zero hours contracts, not to restrict employment rights, but simply for flexibility. The National Trust, for example uses zero hours contracts but offers those who are employed under them the same pay and benefits on a pro rata basis as full time staff employed by the organisation get.
And it’s not all bad press for the zero hours contract - some have said that the flexibility of this type of contract has allowed the UK to bypass higher levels of unemployment during the recession, giving employers more room to move and so allowing them to take on more staff overall. The Chartered Institute of Personnel and Development research also showed that only 16% of respondents said they didn’t get enough hours each week, but the rest were being kept fully employed under the contracts.
Although the controversy around zero hours contracts is likely to rumble on for some time, for employers who use them it is worth waiting for the results of the government review before taking any action. Whilst these contracts have been demonised in the press, the reality might be that they are actually better suited to the current UK business environment than first thought.