Zero hour contracts moves on to UK election agenda

The issue of zero hour contracts is set to become one of the issues of the next UK general election on 7 May next year. Now the CIPD – the professional body for HR and people development – has stepped in offering its broad support to Labour party proposals to prevent the exploitative use of zero hours contracts.

However it warns that some recommendations go too far and urges policy makers to remember that, in many cases, zero hours contracts can work well for both workers and their employers.

The CIPD backs the call for greater clarity over employment status terms and conditions, a point which the institute has made in its response to the BIS and Pickavance reviews into zero hours contracts, and agrees zero hours workers should be compensated if shifts are cancelled with little or no notice.

However, proposals to give zero hours workers the right to request fixed hours after six months and to give some zero hours workers an automatic right to a fixed hours contract after 12 months go too far. The CIPD believes a right to request fixed hours after six months, putting an onus on employers to demonstrate that their business needs could not be met by any other form of flexible contract, would not combat job insecurity, because employers would seek to get around this by providing very low minimum hours contracts or by using agency workers instead.

An automatic right to a fixed hours contract could have similar unintended consequences. For example, employers might cease to use zero hours workers before the 12 month deadline, adopting short hours contracts or using agency staff. The CIPD suggests that a light touch right to request a minimum number of hours after a year would be a preferable alternative.

Ben Willmott, head of public policy at the CIPD, said: “We broadly welcome the Labour proposals to reform the use of zero hours, with a caveat over the plans to provide a right to request fixed hours after six months and an automatic right to fixed hours for some zero hours staff after 12 months unless the employee or worker seeks to opt out of the arrangement. This last suggestion in particular would increase red tape, and is likely to lead to disputes and create more work for employment lawyers. Our research with employers suggests that employers would respond by using very low minimum hours contracts or increasing the use of agency staff if these types of restrictions on zero hours were introduced.

“It is important the debate about zero hours contracts is based on evidence rather than anecdote. Our research finds that, overall, zero hours workers are as satisfied with their jobs as other workers, report better work-life balance and lower levels of stress. However our research did highlight areas of concern, for example almost half of zero-hours workers say they receive no notice at all (40%) or find out at the beginning of an expected shift (6%) that work has been cancelled.

“CIPD research shows that the main reasons employers use zero hours contracts are to manage fluctuations in demand and to provide flexibility for the individual. About a fifth of zero hours contract employers say that working hours for the zero hours staff are broadly the same each week and it is right that such employers should think carefully about whether they need to use these types of working arrangements. We think a better way of encouraging employers to do this would be to introduce a light touch right to request a minimum number of hours after a year.”