Zero Hours Contracts: Divisive and ExploitativePosted: April 20, 2013
by Pat Dodd Racher
Zero-hours contracts bring short-term benefits to employers but remove income security from those workers unfortunate enough to have to sign them. Those workers are growing in number, heading rapidly towards 250,000 in the UK. By the fourth quarter of 2012, 200,000 employees had been hired on zero-hours contracts, meaning they have to be available for work when required but are not guaranteed any work, or income.
This regressive phenomenon reminds me of the plight of landless farm labourers after the appropriation of communal lands by rich individuals by means of the Enclosure Acts. Without land and dependent on irregular wages, country dwellers flocked to work in the factories of the Industrial Revolution.
A big difference now is that workers on zero-hours contracts do not have permanent, paid jobs to go to. Like unpaid interns, they are casualties of economic contraction. The 200,000 on zero-hours contracts in the latter months of 2012 were a quarter more than the 161,000 recorded a year earlier, and approaching three times more than the 75,000 reported in the final three months of 2005. An estimated 23% of employers with over 100 staff are making use of zero-hours contracts, according to a report in The Guardian* in April 2013.
Mark Mitchell, chief executive of recruitment firm Meridian Business Support, had a letter published in The Sunday Times business section on April 14th 2013, headlined ‘Zero hours give bosses vital flexibility’. Mr Mitchell said that “as long as both the worker and employer are content, the model is beyond reproach”.
He did accept some downsides, notably that jobseekers “hoping for regular income and work patterns do not always get them” but defended this in the interests of the flexible labour market.
This type of contract does give employers bucket-loads of flexibility, but workers do not know from week to week whether they will earn anything at all, and thus they cannot make financial plans and risk not being able to support themselves or their families unless they claim state welfare benefits.
Zero-hours contracts are being used as a loophole to escape the Agency Worker Regulations. These are European Union regulations which came into force in the UK in October 2011, and which require staff supplied by agencies to be given the same pay rates, hours, annual leave, breaks and rest periods as workers who are directly employed. All the time that zero-hours arrangements are legal, employers are likely to use them because they cut costs.
They probably don’t do much for staff loyalty, but employers do not seem bothered, probably believing that there is no shortage of new recruits.
Mr Mitchell believes that the numbers with zero-hours jobs will grow and grow, as employers respond to auto-enrolment into workplace pensions (being phased in between 2012 and 2018), and to real-time PAYE notification to Her Majesty’s Revenue and Customs (from April 2013), by cutting back on job contracts offering specified pay for specified hours, and replacing them with the obligation to be available for work, in return only for pay when the employer wants work done.
Employment on this uncertain basis is a step back towards a past we thought had been left behind, a past of serfdom and slavery, a past in which there is no social contract and in which workers are depersonalised units of cost.
The media, argued Mr Mitchell, “does not fully understand Britain’s economic reliance on the agility and dynamism of the labour market. Small businesses need flexibility to be able to grow”. It would not be so bad if the flexibility were shared, if banks said “repay your loan when you can”, if suppliers said “use our materials and pay us when you feel the time is right”, but it is only the workers who are being forced into ‘flexibility’.
In some respects zero-hours jobs are more exploitative, albeit less physically cruel, than some manifestations of slavery. Slave owners had to house and feed their slaves or they were not capable of working, but modern employers have no compulsion to ensure their workers have a roof over their heads and food in their homes. Is this the society we really want? Or is it the latest manifestation of the attitude that there is “no such thing as society”?
* ‘Big rise in firms hiring staff on zero-hours contracts’, by Phillip Inman, The Guardian, April 2nd 2013.