For billionaire Mike Ashley epitomises the face of multinational greed. He is the biggest employer to use zero-hours contracts (ZHC) to potentially stop the 20,000 part-time staff at his retail empire gaining a second job. It means 90 per cent of workers at his Sports Direct stores have no guaranteed working hours and must seek permission from management to work elsewhere.
The revelation comes a year after senior management at Sports Direct took share option bonuses worth three times their pay. The fact that Ashley has a personal fortune of an estimated £3.75 billion, according to the Sunday Times Rich List, is also under scrutiny. The way to join the ranks of the super-rich, it seems, is to rip your poorest workers off. And the poorest workers suffering under these contracts are usually women, young people, the retired, and itinerant workers.
The policy was described as unfair and exploitative by MPs and campaigners. However, the contracts are still legal and it is only the proviso that an employee can be prevented from taking other work that is to be made illegal.
So what are ZHCs, in a nutshell? Well, they provide provisions which create an ‘on-call’ arrangement between employer and employee. The employer has no obligation to provide work for the employee, while the employee agrees to be available for work as and when required. The employee receives compensation only for hours worked.
What is the truth behind the headlines? There must be positives, otherwise employees surely wouldn’t accept these contracts. Well, firstly, there’s a good chance you might be subject to them. At the end of April 2014, the Office for National Statistics revised upwards the number of workers on such contracts from 580,000 to 1.4m, with a further 1.3m where no hours were worked. (Based on a survey of 5,000 of its members, the union Unite estimates that as many as 5.5m workers are subject to ZHCs.)
The Work Foundation’s study last year found that a significant share of ZHCs (43%) are filled by people in the top three occupational groups – managers, professionals, and associate and technical staff. A fifth (17%) were manual skilled or semi-skilled jobs, and just under another fifth (also 17%) were care, leisure, or sales jobs. Just over one in 10 were unskilled, and just over one in 10 were administrative.
They are frequently used by hotels, catering and leisure, education, and healthcare, as well as IT and accountancy. Another report revealed that 61% of colleges and more than half of universities use them to employ lecturers.
Are people being forced into these contracts, due to the recession? Well, 44% had lasted for two years or more with the same employer, 25% had lasted five years plus, and 75% had been in a job for more than two years. While just over 25% of people on ZHCs said they would like to work more hours, three-quarters were happy as they were.
Zero-hours more appealing to women?
However, the facts and figures can be varied and interpreted different ways. For instance, a survey carried out by women’s equality charity The Fawcett Society found that, of the thousand sample women earning less than £7.44 per hour, women in London were twice as likely to be forced into ZHCs than anywhere else in Britain (32%).
The research reveals that most of the women did not choose to go on a ZHC but they were pushed into it through pressure or circumstances, either by their employer or the JobCentre. This is backed up by the fact the Government had been pushing people into these types of contracts in order to bring the unemployment figures down. And ministers can jump on the bandwagon all they like for things are only going to worsen for the unemployed, with Tory employment minister Esther McVey saying they should be described as ‘enabling’ contracts rather than zero hours.
Those who have been hit by redundancy, especially the highly skilled and highly educated, may well disagree. For there will be no guarantee of minimum hours or pay. Jobseekers could lose their benefits for three months or more if they refuse to take ZHCs for the first time under the new system. So it means you can be forced into taking any job, no matter how menial, despite your qualifications and experience, for virtually no pay. It means, if you have no savings and a poor redundancy package, that you could go from a high-earning, high-status job to homeless within six months.
Forget about getting a mortgage. Even a mobile phone contract may be denied as the uncertainty of your work situation proves a major risk to lenders.
The Fawcett Society’s Deputy Chief Executive, Eva Neitzert, said: “ZHCs provide the ultimate flexibility for employers but our research shows that this comes at a cost to some of the most vulnerable workers – those on low pay.”
Yet it can also be argued that women, especially, can benefit from them – as long as they have an understanding employer. For instance, when a professional woman takes time out to have children, she misses her salary at a time she needs it most but, most importantly, technology moves on fast. Being out of the workforce mean she loses out on vital skills that enable her to re-enter the workforce. Yet ZHCs mean, as long as she has family on hand to help out (Government support for mothers is atrocious), that she has the flexibility to retain and enhance her skills.
Students can also reap the benefits, freeing them up to attend college while also paying off those extortionate student loans. It also means they have the freedom and money to travel, while making vital contacts, and enhancing their CVs. While the flexibility enjoyed by those who don’t want to work full-time is a distinct advantage. These days, people often need to top up their pensions. ZHCs allow people to do just that.
Gaynor Thompson, for example, works in education and says they are ideal for her situation. "As I am currently semi-retired, a ZHC is far more suitable for me as I cannot commit to a regular working pattern involving set working days. “I find the flexibility very appealing as I can choose the days that I can commit to. It also helps me stay in touch with my work within the education sector."
The contracts can also benefit the many people looking for part-time work to supplement their household income. It is possible, with decent employers, to have multiple ZHCs at the same time with different companies and decline to work the hours offered in any particular week without arbitrary sanctions.
And, obviously, if you are an employer, there are countless positives. New figures released by the Office for National Statistics show nearly half of big companies in the UK use a total of 1.4 million ZHCs. It means you have a workforce ready to act when the work comes in. It means you can avoid paying fixed overheads, as well as sick pay.
Relatively controlled levels of unemployment in the UK have been helped by this versatile contract type, which allows work to be offered where it exists, keeping people in the workforce, and their skills and expertise up to date. ZHCs help businesses respond quickly and efficiently to constantly changing levels of demand, keeping prices as low as possible by not having customers pay for service that they don't need.
But is the fact they are increasingly being used by large, multinationals, which can well afford to provide regular pay and conditions for their staff, as well as flexibility, a matter of concern?
After all, businesses across much of continental Europe, including in economic success-story Germany, manage without ZHCs. What we need is further regulation against misuse. Not an outright ban for ZHCs, as some people have called for, as they work well for many people, but, at the very least, a voluntary code of good practice.
At the moment, employers bear no risk, avoiding sickness pay and overtime.
The instances where ZHCs are used as a management tool, with hours offered or taken away according to whether or not employees toe the line, need to stop. Similarly, employers should not be able to remove hours from employees to avoid formal redundancy - a practice known as ‘zeroing down’.
However, even if the law was extended to prevent further abuses, the poorest sectors of the workforce – often women – would still be powerless. The recently implemented employment tribunal fees of £1,300 mean there is no way a worker on poverty pay can ever pursue better treatment.
Still, the Mike Ashleys of this world need to be prevented from abusing their powers, using the recession as a stick to beat the poor while lining their own pockets. We cannot build a confident, thriving nation if we have the attitude that our workforce is disposable.