Unemployment stands at a seven year low. This headline shouldn’t satisfy today’s many ‘zero-hours’ contracts (ZHCs) workers, despite what they are reported to have said, argues Glynne Williams, Senior Lecturer in Industrial Relations at the School.
According to the Chartered Institute for Personnel Development (CIPD), there are now around 1.3 million ZHCs. Even allowing for double counting (the Office for National Statistics (ONS) estimates 744,000 workers depend on one or more ZHCs), this is an increase of one third in two years. If it is true that new jobs have come at the expense of stable hours and secure income, then this affects not only individuals, but also the prospects for sustainable economic growth. Unpredictable earnings mean workers don’t take out mortgages, don’t have the confidence to spend and often rely on in-work benefits to survive.
“There is no generally accepted definition” of a ZHC, says the CIPD. But the ONS is quite clear: a ZHC – logically enough – is a contract that does not guarantee a minimum number of hours. The ONS points out that increased familiarity with the term may influence survey results. But this needs to be set against possible under-reporting. For example, many ‘casual’ employees have a relatively stable shift pattern, but no guarantee of work from week to week. They may not think of themselves as ‘zero-hour’ workers, but that’s what they are. We also need to recognise that self-employment is often a euphemism for something very similar. There were 8% more self-employed in 2014 than in 2008, while income fell by 22%. In London 17% of all workers are now self-employed. We can confidently say that not all of these have enthusiastically embarked on a new life as entrepreneurs. So perhaps ZHCs are more common than surveys suggest.
The government has been understandably keen to portray ZHCs in a positive light and the CIPD report gives it some welcome support. Inconveniently for the critics, it seems that people actually like this way of working. According to the CIPD, zero-hours workers are more likely to be satisfied with their jobs than are their permanent, full-time colleagues. Besides, ZHCs account for only a small proportion – approximately 5% – of the workforce. So, rather than demonise employers, the CIPD suggests, shouldn’t we recognise that flexibility also benefits employees? Chief executive Peter Cheese warns against “heavy-handed” attempts to reform them.
The CIPD also finds that workers on ZHCs are more likely than their colleagues to be satisfied with their ‘work-life balance’. Hardly surprising, perhaps: ZHCs may be run ragged at work, but there’s no denying that they tend to have more free time on their hands, even if it tends to come when they least expect it. The problem, of course, is not the number of hours, but their unpredictability. True, flexibility can work both ways, but beware of generalisations. You may be a whizz kid who can afford to pick and choose, but most people can’t risk turning a shift down for fear of not getting another. A 2014 report found that a third of employers expected ZHC workers to be available for the shifts on offer. And less than half of those surveyed by the CIPD have a policy of giving notice when they cancel shifts. You may only find out when you turn up for work. It seems likely that the people who are most satisfied with their contracts are those who least need the work. For anyone with bills to pay, unpredictable earnings mean uncertainty, disruption and hardship.
This is a political question about what sort of society we want, so we won’t settle it on the evidence alone. We certainly won’t settle it on this evidence, because employee ‘perceptions’ are a poor substitute for facts. How satisfied am I with my job? It depends what my benchmark is and what alternatives are on offer. Attitude surveys of this sort have much in common with customer reviews. Tripadvisor suggests a world where people are just as satisfied with basic hostels as with luxury hotels. That doesn’t mean they wouldn’t upgrade if given the chance. Moreover, the fact that two thirds of ZHC workers are ‘satisfied’ with the arrangement doesn’t mean that we should be satisfied with it. Contracts that make it impossible to predict next week’s earnings are simply a bad thing. We know this already.
ZHCs are an indicator of a bigger trend. Almost half of the employers concerned say that ZHCs are part of their long-term strategy, so this is rather more than a buffer against fluctuating demand. It is also naïve to see ZHCs as a route into more secure work for young people: two thirds of ZHC workers are over 25 and almost 20% have been in the job for more than five years. Let’s face it: if you still can’t plan the work after five years, something is very wrong with your business or with your managers.
The government has attempted to make ZHCs more palatable by banning exclusivity clauses. Messing about with the detail just won’t do. The bottom line is that all workers should have the same basic rights and that includes the right to steady hours and a dependable wage. Core contractual hours topped-up with variable hours: that’s how most employers operate. Minimum notice period for varying hours and full payment for shifts cancelled at short notice could be achieved quickly and without serious risk of loss of jobs. Then let’s see how many workers would be ‘satisfied’ to return to the old system. ZHCs offer no benefits that couldn’t be achieved by good management and good employee relations. We don’t need to ban flexibility. We need to make it a reality.