Labour’s proposal for Zero-hour contracts: comments from the community

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General Election 2015
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In his speech Ed Miliband announced that his Bill to end zero-hour contracts will be one of his top priorities. Miliband portrays zero-hour contracts as exploitive and unfair and wants to give workers the right to request a standard contract after 12 weeks.

There have mixed responses to the speech.

John Cridland, director-general at CBI, believes zero-hour contracts have created a job market that is envious but more could be done to tackle issues and abuses. He says:

“The UK’s flexible jobs market has given us an employment rate that is the envy of other countries, so proposals to limit flexible contracts to 12 weeks are wide of the mark.

“Of course action should be taken to tackle abuses, but demonising flexible contracts is playing with the jobs that many firms and many workers value and need.

“These proposals run the risk of a return to day-to-day hiring in parts of the economy, with lower stability for workers and fewer opportunities for people to break out of low pay.”

 

Matthew Irvine, associate, Thomas Eggar LLP thinks that Miliband’s proposal would jeopardise current zero-hour contract employees and create more job insecurity. He says:

“To many this will seem an eye-catching and attractive policy with Miliband championing workers’ rights over capitalist employers who are putting profit above workers’ welfare. The risk, however, is that this proposal goes too far and would endanger the continued economic recovery.

“In reality, employers may well choose to dismiss workers before they reach 12 weeks or be reluctant to offer work in the first place.  Whilst Cameron may have admitted he couldn’t live on one, a zero-hours contract is likely to be better than no contract at all.  Miliband’s proposal would potentially undermine job creation, jeopardise zero-hours workers’ current jobs and increase their insecurity.

“Banning the use of “exclusivity” clauses so that employers cannot prevent a worker on a zero-hours contract working for another company seems reasonable and fair. Miliband’s proposal, however, attempts to give workers more stable contracts but does not show sufficient consideration of the likely implications for employers and the knock-on effect for workers. To put it simply, it isn’t balanced, he hasn’t shown his working and hasn’t come up with the answer!”

Rob Crossland, founder and chief executive of professional umbrella employer Parasol, believes the plan had the potential to boost the contingent workforce management sector. He says:

 

“It seems logical that, faced with these proposals being enacted, hirers would look to make greater use of third-party employment providers that free them from the risks and costs associated with taking on staff.

“Employers in many sectors have an inherent need for access to a flexible labour pool, in order to respond to fluctuations in workload and demand.

“By outsourcing employment of contingent workers to an ethical umbrella provider, organisations can minimise their exposure to risk whilst ensuring that workers are enjoying full employment rights and benefits – including guaranteed minimum hours of work.

“Given the recent demonisation of our sector by Labour and the trade unions, it’s ironic that we could actually end up benefiting from this policy.

“We have always maintained that professional umbrella employers have an important role to play in the UK labour market, and this policy announcement by Labour goes to prove our point.”

Neil Atkinson, Managing Director of Deminos, believes that changing zero-hour contracts will bring more benefits to the employee and provide more employee rights. He says:

“In the UK, taking a job with an employer involves some fundamental rights that are not affected by so-called Zero Hours Contracts. However, other rights that are accumulated over time in a job might take longer to accrue under these arrangements. If the contracts are properly managed and monitored they can work well for both parties.

“The General Election debate is demonising employers who operate these legitimate and flexible arrangements. Zero hours contracts can be used to create a pool of workers who are ‘on call’ – for example, for unexpected surges in work, to cover for specialist staff who may be on leave or ill, or for work such as restaurants planning for a wedding party.

“However, if the contract provides that the worker must work a fixed number of hours, must be available for work whenever they are offered it, and cannot therefore work for anyone else too, or if the worker has a reasonable expectation of regular work and if the organisation exercises a high level of control over the individual when they are working, this can mean that they are employees, with full employee rights.”

 

Title image credit: Anthony Mckeown

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