Victoria Phillips is head of employment rights at Thompsons Solicitors
The weekly Thompsons Solicitors Blog
You might think the outcry after a report revealed that more than a million people are on zero hours contracts would make government ministers think twice before bragging about other ruses to take advantage of desperation for work. But not this government – or, at least, not Lord Freud, the Minister for Welfare Reform.
As ever, nasty stuff has a euphemistic name – ‘slivers of time’ – the idea being to create a marketplace where workers bid against each other to see who can offer the lowest price to do very short, sub part-time, periods of work.
Some local authorities, including Tory-led Hammersmith and Fulham, have been using it for several years, and Tesco opened up slivers of time to its workforce in 2010.
The champion of this scheme, Lord Freud, is a man with no background in social policy and who is best known for leading the somewhat botched floatation of Eurotunnel.
He is responsible for spearheading government attacks on the Welfare State and is notorious for commenting that Scottish welfare claimants should get a job if they wanted an extra bedroom.
At a fringe session on welfare at the Conservative Party Conference, Freud described slivers of time as ‘a marketplace for short hours’ where an employer would say ‘right, we want three hours on Wednesday afternoon – what am I bid?’ That group would then say ‘I’ll do it for £10 an hour, £15 an hour… whatever’.
In other words, slivers is a Dutch auction for job seekers’ time, set up to encourage it to be sold as a commodity in a race-to-the-bottom. And, if people are forced to work at rates below the national minimum wage, such contracts could potentially be unlawful.
In his speech to the Conservative Party Conference, David Cameron announced that 16 to 25 year olds ‘Neets’ (Not in Education Employment or Training) who refuse to take up offers of education, work or training will have their benefits stopped.
But rather than conjuring up ideas for finding random hours of work to fill on shoddy terms, the government should concentrate on how best to place people into real jobs on a fair rate of pay.
Slivers of time may well have positive applications in limited circumstances if done on the worker’s own terms. But its integration into a benefits regime that operates on compulsion takes us back to the Victorian days and the fundamentally exploitative nature of workers having to tout for anything they were lucky enough to get.
Read the Labour & European Law Review on zero-hours contracts
Paul Moloney is a member of the Unions21 Steering Committee and Industrial Relations Manager for the Society of Radiographers
The latest debate on zero hours contracts seems to be taking place with little or no trade union input. Instead, owners of small businesses are invited by various different media to speak up for such contracts. One such “entrepreneur” is quoted in the Guardian (letters, 6th August 2013) saying that “we can employ people on fixed hours contracts when you, the consumer, are prepared to pay them to sit at home”. So the blame for the use of archaic employment practices lays with us the consumer.
Frustratingly, with no union view sought, no one seems prepared to challenge this view. Instead sympathy goes to the struggling business owners doing their utmost to meet our needs as consumers while the Institute of Directors claims that without zero hours contracts the UK economy would have “gone the same way as southern Europe”.
But let’s be frank. Any business that relies on zero hours contracts, whether in the private or public sectors, is a business that has an unfair competitive advantage over those not resorting to such tactics. They have an unfair advantage either because using zero hours contracts is the only way they can make money, in which case are they really the type of business our economy needs, or they are making unfair and excessive profits compared to others.
While it is tempting to see all business owners as money grabbing, unscrupulous profiteers the likelihood is that many are simply masking their lack of entrepreneurial skill by exploiting workers, shifting the blame on to consumers and as a consequence undermining companies with a stronger vision who do wish to compete through long term sustainable policies based on using skills to be better not cheaper.
We therefore need to shift this debate away from the Institute of Directors and the individual small business whose owners may genuinely believe they have no choice but to use such contracts. No doubt these are the same people who predicted the collapse of our economy when the minimum wage was introduced and for whom the concept of a living wage is as alien as the idea that work should allow people to develop their skills and contribute meaningfully to society.
We need to do this because the zero hours contract issue is part of a much wider debate that touches on all of the issues looked at by unions 21 through the fair work commission. Zero hours contracts should be outlawed, but not just because they exploit individual workers, but because they are part of a series of measures that help prop up failing businesses that otherwise would not be able to compete with those businesses that do invest in decent employment conditions, skills and maybe even trade union recognition.
In the 1970s and 80s the Tory’s made much of Labours attempts during the 1974-79 period to prop up “failing” businesses by nationalising them. So why should today’s workers artificially prop up failing businesses today by accepting a form of exploitation that many of our international competitors in Europe avoid.
We also need to start challenging with some vigour the idea that consumers want something different to workers and therefore demand zero contract hours as a means of achieving the aim of goods and services at the lowest possible cost. Instead we need to make the argument that not only do consumers and workers have identical interests they are in fact the same people!
And we need to challenge the Institute of Directors and its view that a de-regulated, low wage, low skill economy is the only way to compete internationally.
Information about our fringe meeting on zero hours contracts at Labour Party Conference can be found here.
Victoria Phillips is head of employment rights at Thompsons Solicitors
The weekly Thompsons Solicitors blog
The big news of the week is McDonald’s doesn’t seem to know how many staff they need from one day to the next.
You would think, after all these years of selling burgers in Britain, they would have pretty good systems for monitoring the appetites of their customers. But it seems they don’t trust themselves to get it more than 10% right.
That surely can be the only legitimate explanation for McDonalds having 90% of its staff on zero-hours contracts and being told from week to week if and when they will be needed.
But do they seriously believe that they need that degree of operational flexibility? Of course they don’t. The reason McDonald’s puts some 82,000 or so people on zero-hours contracts is because they want to keep them in a permanent state of insecurity, in fear of rocking the boat and not being given any paid work.
A survey of more than 1,000 employers published this week by the Chartered Institute of Personnel and Development found that more than one million workers are on zero-hours contracts – far more than the government’s official figure of 250,000.
Vince Cable, the business secretary, says he’s reviewing the problem and will decide in September whether or not to hold a formal consultation on specific proposals.
But it’s really not that complicated. There is no excuse for major employers – most of them making huge profits – to have thousands of people on these shoddy terms.
It doesn’t take a genius to plan the number of staff you need. Few employers would need more than a small minority of casual staff to deal with peaks and troughs. Most of them are predictable – after all, we know Christmas comes every year.
If employers aren’t prepared to do the right thing, the government already has the power (so far unexercised) in section 23 of the Employment Relations Act 1999 to confer rights on individuals.
This should include the right to work for more than one employer and the right to turn down work without losing the contract.
The Institute of Directors claims a ban on zero-hours contracts would be ‘extremely damaging’ to the economy. Really? I can’t see McDonald’s turning its back on its burger-loving British customers – though maybe we should turn our back on them.
Read more about zero-hours contracts in this week’s LELR Weekly.
See news about the Unions21 Labour Party Conference event on Zero Hours here