Labour could move to ban the use of “zero-hours contracts” if they win the next election. Party leader Ed Miliband told the Guardian on Saturday of plans to introduce tax breaks to companies in order to persuade them to pay more to lower-paid workers. The following day, shadow health secretary Andy Burnham said on the Andrew Marr show that he would “go further and ban things like zero-hours contracts”.
Over 200,000 British workers are employed under these controversial terms, with 23% of Britain’s major employers – eg, those with more than 100 staff – utilising them. In 2004, that figure was just 11%. The contracts involve an employer hiring a worker, but not guaranteeing them any fixed number of hours per week. However, the employee is expected to be permanently on-call in case they are needed.
As they typically prevent workers from committing themselves to other employers, zero-hours contracts have been criticised as exploitative – and have also been cited as dodges for firms that want to avoid agency-worker regulations. Another point against them is that they could lead underused workers to lose their skills. Supporters, though, have argued that these arrangements offer flexibility for people who are juggling family commitments, or for those who are retired but happy to take up occasional work.
Perhaps the answer lies in some sort of regulation. It is certainly true that zero-hours contracts are useful for start-ups, or for industries in which demand can fluctuate. However, employees deserve to know what sort of hours to expect, and should not be kept hanging on as “backup, just in case”, if the reality is that they will probably not be needed.
It will be interesting to see whether banning these contracts outright would remain a personal objective for Burnham – or even be adopted as party policy – should Labour win the 2015 election. But managers would do well to set up contingency plans for their potential restriction at some point in the near future.