Straight-talking on zero-hours contracts
14th November, 2024
By Jenny Herrera, CEO of the Good Business Charter
For the final part of our Autumn blog series on workers’ rights, we’re addressing zero-hours contracts (ZHCs) and why the Good Business Charter supports efforts to end exploitative practices in these arrangements. While ZHCs are often defended for their flexibility, a closer look reveals a troubling reality for many workers.
Do workers really want zero-hours contracts?
It would be good to start by demystifying the much-stated comment that ‘most people want these’ because they like the flexibility ZHCs offer given they can turn down shifts they do not want to do.
Yet a poll of zero-hours contract workers conducted by the TUC in August of this year revealed that over 8 in 10 (84%) want regular hours of work, compared to just 1 in 7 (14%) who don’t.
Those in favour of ZHCs often reference groups like students and retired people who are happy to take the occasional shift on this basis. It can feel easy to trot these examples out, but actually if a retired person is doing some of these jobs, like events which require a lot of time on their feet, it is probably done because they need the work.
Similarly, if we make the assumption that students are happy to be at a company’s beck and call for shifts, and as easily dropped if not needed, it suggests a lack of respect and dignity for them. It they have committed to a shift, they may well have said no to other commitments as a result. Suddenly cancelling a shift without any pay may leave them missing out twice because of what they said no to.
Our position on fairer hours contracts
When the Good Business Charter was formed, the issue of secure work was a hot topic with a lot of back-and-forth on what was reasonable in this area of zero-hours and minimal hours contracts. In the end we settled on a position of needing to give 2 weeks’ notice of shifts and to pay those shifts in full if cancelled within 2 weeks. In addition, each year there should be an annual review with the worker to see if they could be brought onto a fixed hours contract based on their work in the last year.
The government’s proposals reduce this one-year period to 12 weeks, helping bring security in quickly. They are currently consulting on issues around payment for shift cancellation. It is worth noting that the Living Wage Foundation sets a higher bar of 4 weeks for their Living Hours accreditation. They have done a lot of work highlighting the double issues surrounding low pay and insecure work, stating that:
More than half (55 per cent) of low paid workers earning below the Living Wage are in insecure work (3.4m workers in total), compared to 11 per cent of those earning at or above the Living Wage (2.7m in total). This makes low paid workers around five times more likely to be in insecure jobs than those paid above the Living Wage.
Why fairer hours matter
We champion responsible business behaviour and we want to see a country where people are valued. The nation is struggling with productivity and there is no doubt in our mind that if people have secure work that pays enough to live on, alongside genuine employee wellbeing, an inclusive workplace and one where they have a voice, the structure is in place for employees to be productive.
Our focus when talking about fairer hours is those struggling to make ends meet whilst guessing how much they’ll earn each month. On top of that they may arrange childcare and find a shift cancelled but be unable to cancel the childcare, thus having to still pay the childcare provision and ending up out of pocket. Many on ZHCs struggle to get a rental contract or mortgage because of the lack of guaranteed fixed hours.
Aside from these practical issues, there is at work a terrible power imbalance where workers can be begging for shifts – McDonalds a recent example of this at play – and many are fearful of taking annual leave or being unwell in case they cannot pick up shifts afterwards because of it. This is not how responsible businesses should behave towards people they are dependent on their business for. After all, without people, there is no viable, functioning business.
The future of fairer hours
We welcome the Employment Rights Bill and its approach to bringing an end to exploitative zero-hours contracts. To businesses citing all those who like such contracts I would say that is not backed up by the reality of those on the lowest pay. High-paid people doing a bit of extra work are clearly not the focus of this legislation – the flexibility of hours suits them as much as the company and they don’t get a huge financial blow if the work suddenly doesn’t materialise (indeed they may have insurance in place to cover this).
We appreciate businesses feel they need the flexibility of ZHCs but they must accept that is at the expense of the individuals involved – and not just because of the issues they experience with uncertainty of work and therefore income, but also those same individuals often find themselves isolated from the business’ general policies on wellbeing, employee voice, etc. Too often they are treated like a second tier of worker – seen as ‘just casual’ or ‘not core’ thus adding to that sense of vulnerability.
As the government consults on its approach, we would suggest if banning zero-hours contracts altogether is too difficult, it might utilise our fairer hours approach – something that has been agreed by business and worker groups alike. 2 weeks’ notice of shifts and paying a shift if cancelled within 2 weeks ensures businesses think carefully about who they actually need and respect the lives and finances of their employees. The idea of a discussion after a set period of time to then offer guaranteed hours is to recognise a reality and give the worker security. That shouldn’t cause undue problems for businesses, or not for responsible, people-first businesses at any rate.