With the recent media publicity, it would be easy to believe that ‘zero-hours’ contracts are a new concept. Actually, these contracts have been used for quite some time. The use of such contracts has risen sharply in the recent recession. It is estimated that approximately one in five workers in the UK are now on zero-hours contracts.
So what are zero-hours contracts? A zero-hours contact is used by employers who want to be able to engage a worker on an ad hoc basis with no guarantee of work or pay. The use of such contracts allows employers to avoid paying fixed employment costs and gives them flexibility to adapt the size of their workforce to the amount of work available. The worker is however expected to be available for work, if and when required. They are most commonly used in industries where work levels fluctuate, such as retail, tourism and agriculture.
Trade Unions have recently called for zero-hours contracts to be banned and claim that they leave workers without financial stability and security, leading them open to exploitation. It is true that workers under such contracts have less employment rights than employees and some are not getting as much work as they would like or need.
Vince Cable has ruled out a ban on zero-hours contracts but has announced that the government will be launching a consultation in order to tackle their abuse.
In our view, Vince Cable’s approach is right. A ban on zero-hours contracts would be a step too far because they can provide businesses with the flexibility to respond to changing levels of demand and also benefit people looking for a flexible work pattern. However, this clearly needs to be balanced against the need to treat workers fairly.
Let us know what you think. Do you use zero-hours contracts in your business?