Zero-hours contracts - Unacceptable exploitation or important flexibility?

7th April 2015

Last week's campaigning for the 2015 General Election was dominated by the controversial issue of zero-hours contracts.
The number of new jobs created as we emerge from the recession has risen, but only a proportion of these jobs are full-time, permanent roles. Office of National Statistics figures show that the number of zero-hours contracts has soared from 1.4 million in January 2014 to 1.8 million in August 2014. Almost 60% of those workers have been with their employer for more than a year, working on average, 23 hours per week.
The Coalition Government has introduced draft legislation which seeks to curb abuse of these contracts, principally by banning the use of exclusivity clauses that prohibit workers from working for another employer, or from doing so without their employer's consent.  However, Labour argues this does not go far enough; they claim to be putting workers at the heart of their election campaign with a pledge to outlaw contracts, which Ed Miliband describes as "a symbol of the Tories' failing economic policy".
Labour propose that workers on zero-hours contracts should be entitled to convert their contracts into a regular job after three months of regular hours. This is a step further than the timeframe of 12 months as previously set out by Labour, and one which raises the questions of how to define "zero-hours contracts" and precisely which forms of contract would be covered by their proposals? Would they cover only employment contracts, or extend further to contracts with 'workers'? Would they cover only those contracts under which there is no obligation to offer or accept any work, or would they go further? Currently, these important questions remain unanswered.
Labour's proposals have been criticised, not least by the Conservatives. David Cameron has spoken of the benefits to both workers and employers of retaining the flexibility offered by zero-hours contracts. However, he also admitted, when pressed by the BBC's Jeremy Paxman, that he could not himself live on a zero-hours contract!
It seems clear that whatever the outcome of the Election, there is likely to be new legislation on zero-hours contracts. Employers will need to monitor these changes to assess the resulting implications for their resource planning and labour costs. Meanwhile, employment policy remains a key battleground in the General Election campaign.


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