Last week in the Independent newspaper there was an article that the Royal Bank of Scotland is actually advising its clients on using Zero hour contracts. So far they have advised over 11,000 business clients across the UK and there are now well over 583,000 people on these contracts.
These contracts allow firms to hire staff without any obligation pertaining to the number of hours worked. It means that staff have no guarantee of hours of employment. So exactly how are employees to make a living?
These contracts , in my view, seem to be weighted in favour of the employer. Firstly an employee has to make himself available when the employer wants them to work. So what happens if the employee is not available? It means that the employee has to keep civil and polite to the member of staff actually allocating the work and can lead to favouritism. It becomes very much like the system of employing dock workers as casual labourers until 1945 and the Dock Workers (Regulation of Employment) Bill.
Many students consider such contracts as being to their advantage particularly when they undertake part time low skilled work such as “flipping burgers”. This will not be the case as failure to be available when needed a few times will mean that they will go to the bottom of the list for work. Many of these contracts also require exclusivity so that the student cannot go looking for work in another burger flipping job. In America many of these burger flipping organisations operate work schedules which depend on complex algorithms based on quantity sold in last hour and time of day with respect to historic sales. It means that an employee expecting to work a full shift might well find themselves “laid off” after a couple of hours and then expected to turn up later. It may then mean that with the high transport costs in the UK, that it costs more to get to work than the pay generated. How long before this work system travels across the Atlantic pond?
All of these contracts are for low-skilled jobs. There is pressure on these types of job for a number of reasons which means the employee is effectively forced into the contract.
- Low skilled jobs are the first to become mechanised and staff numbers reduced as a consequence. An effective example of this is the self-service check out in supermarkets. Nowadays there is just one operator covering anything from 6 to 12 check out stations whereas all the check outs previously required an operator. The rate of theft has probably gone up but supermarkets are still financially better off with this system.
- Due to our inability to control immigration, and the influx of low skilled labour from Eastern Europe, the number of individuals competing for these types of jobs has increased. These individuals are often transitory and consequently compete on an unfair cost basis. For example they are happy to live 6 to 10 in a two bedroom house and therefore housing and power costs are split between all rather than a family unit with one or two wage earners.
So companies and especially big business benefit disproportionately from such contracts.
Workers on such contracts and subsequent fluctuation in their income will have problems with “in work” benefits such as working tax credits and housing allowance. To claim Job Seekers Allowance, you have to work for less than 16 hours in a week and to claim working tax credits work for more than 16 hours and less than 30. Individuals on zero hour contracts tend to have very little savings and with the bureaucracy required to obtain the relevant benefit may well end up being overpaid benefits. This may well lead to penalties or most likely be underpaid and force individuals to use expensive moneylenders. It is no wonder that the use of Food banks is on the increase.
Perhaps one of the worst examples comes from the Citizens Advice Website
“Our client worked for 11 years as a care worker working regular weekly shifts throughout that time but on a zero hours contract. When the homes that he worked at closed down his employer told him he wasn’t redundant because they would look for work at other homes. However because he was on a zero hours contract he received no pay whilst work was sought. Despite asking several time for redundancy pay he was left in limbo with no income”
Closer to home I am aware of a lady who was employed by an organisation on a zero hours contract. She knew that she would get work as the regular employee had left and no one else was available to do the work within the organisation. Eventually the company decided to advertise the position permanently which she duly applied for and was successful. In order to take the position she was forced to terminate the zero hour contract and not work for the company for two weeks to prevent continuity of employment and subsequent employment rights. Two weeks, where because she had effectively made herself unemployed and subsequently had no chance of getting JSA.
Finally a question for which I have been unable to find an answer.
If you are unemployed and the Job Centre sends you for a job or you refuse to accept because it is a zero hour contract and subsequent lack of financial security, does the individual lose their Job Seekers Allowance?
No; these contracts are weighted entirely in favour of the employer and should have no place in the British workplace. I cannot understand why the Labour party (the traditional party of the working class) and the Trade union movement are not making a high profile case to condemn these contracts and make them illegal. Could it be that the people stuck in these positions that have been failed by the education system are unlikely ever to add to their coffers?