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UK: Zero Hour Contracts

Written By: - Date published: 8:56 am, August 7th, 2013 - 9 comments
Categories: business, employment, workers' rights - Tags:

Martin Rowson 06.08.13

There’s a Guardian-led campaign in the UK at the moment over “zero-hour contracts.”

Zero-hour contracts are like some at the Port of Auckland (and the port company want them all to be): no guaranteed hours, on-call at a moment’s notice, no job security, but no ability to get another job.  “Flexibility” for the employer, who has a complete whip hand.

To some the answer is how good this is for business, avoiding the problems of Southern Europe (with their civil-service jobs for life), and some job is better than no job.

But the reality for the employees is very different.  There’s plenty of talk about how it can be what they want, but noticeably the BBC couldn’t actually find someone who liked being on one.  It can work for some students / retired people topping up their incomes, but they’d probably still prefer to have some hours guaranteed.

There are an estimated 1 million on these contracts in the UK and the campaign has resulted in a government inquiry, which may led to regulation.

It appears the largest sector of workers are in the care centre.  Councils cutting austerity budgets are reducing the rights of their workers.  And without the guaranteed hours, workers struggle to pay the rent (let alone get a mortgage), pay the bills, even get food.  Doing society’s duty of looking after the sick and elderly, they themselves are being abused.

It’s common in the private sector too – McDonald’s and Sports Direct have the contracts as a matter of course: each have 90% of their staff (83,000 and 20,000 respectively) on zero-hour contracts.  Even Buckingham Palace is in on the act.

Marx would call this by what it is: exploitation.

… there is an early 19th-century feel to zero-hours contracts. It is as though Britain has gone back to the future, returned to an age where the employer had the whip hand and where the rights that workers enjoyed under the feudal system had been removed.

Research by the Resolution Foundation thinktank shows that those on zero-hours contracts earn less than those on staff or on fixed-hours contracts. They have no rights to sick pay. Holiday pay is often refused. And there is plenty of anecdotal evidence to show that if they turn down work when it is offered – even if it is to take a child for a medical appointment – they will be pigeon-holed as not suitably “flexible”. The choice to refuse work is, in reality, no such thing.

As the Guardian says zero hour contracts are not unavoidable.  If McDonald’s can predict how much meat they need for their burgers, they can surely predict approximately how many hours they will be able to offer an employee, and give them some security in their contract.

… there are other ways to solve this conundrum than indenturing workers or making them wait at the metaphorical factory gate for a tap on the shoulder.

The contented majority, as the liberal economist JK Galbraith termed the 60% of the (ageing, pension-saving) population who use their money and votes to craft the political economy to keep them in clover, are unwittingly supporting zero-hours contracts. Maybe if they knew that paying higher prices meant wages would rise and employment contracts would be more secure, they would open their wallets. The trend, however, is in the opposite direction.

It’s likely to be the case here too, as employers take notice of the government’s philosophy and employment law changes and implement “flexibility”, forgetting their half of the social contract to provide stability and security to their employees.  They lose out with a lack of loyalty from their employees, and their better staff will go elsewhere; but the trend to lower wages and conditions (including health & safety – something the CTU is focusing on with their forestry and mining campaigns) in many parts of the economy is strong.

But wouldn’t those of us with secure wages rather pay a little more for our services and have all members able to join in society?  We’ll be richer as a community for it…

9 comments on “UK: Zero Hour Contracts”

  1. Colonial Viper 1

    Just part of a long and ongoing 35 year slide in employment conditions and real pay. All the while, executive pay and shareholder profits have exploded.

    The Left is doing it wrong, but shows no ability to change strategies or set the agenda.

    In New Zealand we think that things like paid Parental leave is an advancement, but few would care about that if pay levels meant that a single income could still run a household and pay a mortgage.

    • muzza 1.1

      Simply it is this.

      As the mathematilcal certainty of global bankrupcy races towards every corner of the globe at various speed, the system will fight for it’s very survival.

      The system fighting for its survival, explicity implies, that others must suffer/die, while all remaining resources are stolen, to prop up the system!

      Exclusively around the wold, any negative situation (bar a few) that can be seen around the world, is directly attributable to the systems survial mechanism, of fight!

  2. Molly 2

    I always considered the tendency for businesses to hire casual staff over the long term – to be an indication of a lack of ability on the part of management or owner.

    In some ways, it was used as both a way to cope with unexpected workloads and for both employer and employee to see whether a job or occupation fits. But pretty soon, it led onto permanent part-time or full-time work. At least this is what often happened in the hospitality industry many moons ago.

    To compensate for this – casual workers received a higher hourly rate, which included holiday pay etc.
    A justified extra boost – which compensated the worker for lack of security, and incentivised the employer to make a decision.

    This seemed to go out on the tide when the Employment Contracts Bill came in, and all the awards etc floated out.

  3. mickysavage 3

    Very chilling. You can bet that anyone that shows any sort of Trade Union solidarity will not be rung for work because of some crap like they are not a team player. And your reference to the 19th century is very appropriate. It really feels like we are going full circle.

    • Molly 3.1

      ..was thinking a major difference to the balance was near to full employment.

      If you had a casual worker who was a good fit, employers made haste to employ them properly before they moved on.

      There is no balance of power in today’s situation – and now apparently, no “goodwill” either, thanks to Simon Bridges.

  4. idlegus 4

    nz post been doing it for years, their ‘oncall’ posties, could expect a phone call before 7am & be told they are needed, or get no phone call & have to wait til the next day. some ppl are ‘oncall’ for years before they get offered full time employment. also, the oncalls get no holidays or sick days either.

  5. A contract between two parties is not the same as an employee-employer relationship.

    Both parties have equal status in a contract, and a true contract has lawful purpose.

  6. Macro 6

    This law is necessary so that you can have cheap food in the supermarket……

    Producers are at the mercy of supermarket demand. Just in time ordering of food means that producers have about 1 day to supply – but they in turn have no storage (it keeps costs down) eg fresh produce – so they in turn have to have a “flexible labour” (usually foreign workers illegally employed and abused in “gangs” moved around the country (England) as the demand arises) force so no orders mean no work.
    If we really want to do away with this sort of despicable labour laws we must reassess our whole society and our demand for summer produce all year round…

    A very good book on this very topic is “Not on the Label” by Felicity Lawrence consumer affairs correspondent for the Guardian

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