Zero hours contracts – promoting a climate of fear in the workplace

Download a PDF of this article here zero hours

“a  form of working where the worker is not guaranteed any work but has to be available as and when the employer needs them.”

House of Commons Library Standard Note

The definition above identifies the completely one-sided nature of the employment relationship under zero-hours contracts. The worker is literally at the beck and call of the employer, with no guarantee of earnings around which they can plan their finances, no guarantee of any pattern of work. The growth of the use of these contracts is a fact but their extent is a matter of dispute. The original Office of National Statistics (ONS) estimate of 250,000 people on zero hour contracts seemed way too low since one government Minister, Norman Lamb, had announced that there were 370,000 workers on these contracts in the care industry alone. Based on a survey it carried out the Chartered Institute of Personnel and Development (CIPD) estimated that the number overall could be around 1 million or higher. The survey showed that nearly one in five employers use zero hours contracts, with the practice more common in the voluntary and public sectors. The average number of hours worked by people on these contracts was estimated by the CIPD to be 19.5 hours a week. Now the ONS has lifted its estimate to 582,935 in 2013. The Sunday Times, on April 20th, meanwhile, revealed that new figures expected shortly from the ONS were likely to show nearly a million workers on zero hours contracts.

The Financial Times reported in April 2013 that there were almost 100,000 zero hours contracts in use across NHS hospitals, the number having risen by 24% over two years. A House of Commons Library paper reported that ‘Skill for Care’ estimated that 307,000 adult social care workers in England were employed on zero hours contracts in May 2013. The contracts are especially common for staff in domiciliary care services; 61% of these workers in this sector in England were employed on zero hours contracts in Sept 2011, compared to 30% of adult social care workers.

In a series of revelations in the media we learned of more companies that use these contracts for the majority of their workforce. Sports Direct has 80% of its employees on them, McDonalds has nine out of ten of its employees (82,800), JD Wetherspoons 24,000, Spirit Group 16,000, Boots 4,000. All the part-time employees of Cineworld are on zero hours, and Buckingham Palace has 350 summer workers on them. In the best traditions of the monarchy these people cannot work for anybody else without the permission of the management even though they are not guaranteed any hours, week by week.

Some of these workers are working as many hours as a full-time job would provide. The CIPD survey estimated that the average hours worked was 19.5 hours a week. Around 14% of the workers questioned said their employer often fails to provide them with sufficient hours each week to have a decent standard of living. More than a third, 38% of those surveyed by the CIPD, described themselves as employed full-time, working typically 30 hours or more a week. Of the 62% who were part-time, about a third of these would like to work more hours. Both 18-24 year olds and 55 plus are twice as likely to be working on these contracts as compared with other age groups.

Whilst we cannot put an exact figure to the number of people on these contracts they are increasingly used by employers in their quest to cut costs. You can hear people talking about them on public transport. I know a number of people who have found themselves involuntarily on them. In a trip to Weston Super Mare the other week, my partner and I discovered that the public toilets had been taken over by a private company, which had introduced a 20 pence charge. My partner, talking to the attendant, found out that the staff had not been TUPED over from the Council to the new employer (TUPE means being transferred over on your existing wages and conditions of service). They had been made redundant, and offered their job by the new employer, but on a zero hours basis, losing all the terms and conditions they previously had.

There are, no doubt, some individuals who find zero hours contracts fit in with their needs, such as students, retired people, or people who might want work additional to a Monday to Friday job. If you have a scarce skill then you might have some leverage over employers. However, it seems certain that most people simply take the work for want of anything else. Zero hours contracts have even recently appeared in an industry such as the railways.

The ultimate in ‘flexible labour’

This type of contract is the ultimate in ‘flexible labour’, being ideal for the employer, cutting their costs, and giving them absolute power over their workforce. As we know from the interviews that have appeared in the media, whilst such workers can turn down work when it is inconvenient to them, most do not for the simple reason that the employer can effectively punish them by not giving them work if they are ‘unco-operative’.

We know that in the public sector home care workers who used to work for local Councils have been transferred to private companies and have ended up on zero hours contracts. One such woman interviewed on Radio 4 was commonly working over 40 hours a week though it had gone as low as 15 hours. She said that although she could theoretically turn down work if it wasn’t convenient, in practice she would not risk it, because she knows other people who have been punished for doing so by being denied work later.

On Channel 4 News there was a report on the massive Amazon site at Rugely[1]. People who had worked there were interviewed. There is a great deal of anger in the town about the treatment of workers there. The regime inside the warehouse is such that any complaints about the speed of work, the lack of breaks and so on, brings the rejoinder, if you don’t like it we can always get somebody else to do it. Workers could turn up at 7 o’clock and be sent home at 8 o’clock. They were admonished for talking to fellow employees and for spending ‘too much’ time in the toilet. They are constantly monitored so that their ‘pick level’ is up to scratch or else they are released. The reporter pointed out that they had not just interviewed disgruntled ex-workers but some still working there. The level of disenchantment with the Amazon regime is such that the company had to start bussing people in because they were having difficulty in getting enough local people to work there.

Zero hours contracts render workers utterly powerless in the face of an employer for whom these contracts are a means of maximising their profits and cutting their costs, at the expense of the workforce. They are designed to produce a subservient workforce, fearful of speaking out for their rights or those of other employees, because the employer can simply refuse to offer them work. In the case of Amazon we heard that the agency which provided the workers to the company was told not to tell them their legal rights.

Permanent on-call working

Zero hours contracts are in effect a system of permanent on-call working without the usual payment which on-call workers get to compensate them for the inconvenience of having to go to work at a moment’s notice. They exploit the powerlessness of a worker who in most cases cannot afford to turn down the work because of the uncertainty of their earnings.

The ‘flexible labour market’ was supposedly necessary to compete in the global economy. Yet many of the sectors in which zero hours dominate are not open to international competition. Domiciliary care is the classic case. The privatisation of this work has led to a deterioration in the standard of service provided. Staff rush round from home visit to home visit, with no travelling time included, and they have too little time to spend with their customers. There is no continuity of care as there used to be. When a friend of mine broke an arm and required daily visits she had 18 different staff visiting her. This situation is the result of cuts in national funding which have created a regime in which private companies compete for the work, and the only way they can make a profit is by having as few staff as possible, mostly on minimum wage, and driving them as hard as they can. Now we find that many of these staff are on zero hours contracts.

John Cridland, Director General of the CBI said those complaining about such contracts need “a reality check”.

“These contracts play a vital role as a way of keeping people in employment…If we hadn’t had this flexible working when the economy contracted, unemployment would have topped 3 million and it didn’t it went to 2.5 million.”

Presumably staff on these contracts should be grateful that they’ve got something rather than being unemployed. Beggars can’t be choosers appears to be the message.

A fruit grower writing to the Guardian pleaded poverty as the reason for having his staff on zero hours. Of course, even with seasonal work they must have some idea of how many staff they require, and there is no reason why they could not guarantee them a minimum of hours.

Ban them?

Fundamentally zero hours contracts are a means of circumventing the law which applies to ’employees’, denying them the rights that employees have. It is a means of super-exploitation. There are two means by which to oppose them. One is by trade union organisation and action, the other through campaigning for legal redress. The successful strike action by Bakers Union members at the Hovis factory in Wigan late last year showed that resolute action can stop the use of these contracts to dilute employment conditions in unionised workplaces. One of the conditions included in the agreement was that any agency staff working 39 hours for 12 weeks would be put on parity pay.

Organising against zero hours contracts in non-union workplaces is obviously more difficult. It’s no easy task to organise such workers, especially where they do not even share a common workplace. However, it’s the responsibility of the trades unions to show that they are serious opponents of such naked exploitation and, in the case of public services, campaigners for high quality service provision, instead of the cheap and nasty shoddy services delivered by de-regulated private providers.

At the same time there needs to be a campaign for, at the very least, a legal obligation for a minimum hours guarantee. To prevent employers abusing this by chosing a minimum which does not measure up to the actual hours worked, there should be an obligation to adjust this minimum according to the hours worked over a specified period of time.

The mutuality which is supposed to exist in these contracts, the right to offer work, and the right to accept or turn it down, is a myth. All the power resides with the employer. With more than 2 million unemployed and more than 1.4 million workers in part-time work only because they cannot find a full-time job, advantage in the ‘flexible labour market’ rests firmly with the employers. Even the CIPD, which is opposed to banning these contracts says they “cannot be used simply to avoid an employer’s responsibility to its employees”. That, of course, is precisely what they are used for. Workers mostly accept these terms because they are desperate for work. These contracts provide a hand to mouth existence where you have a week to week financial struggle to get by. How can people plan their finances when they have no idea what they will earn from week to week?

Zero hours contracts help to massage the unemployment figures. The ONS admits that those people on them are included as employed even when they do not have any work during the ‘reference’ week. There may well be overlap between zero hours contracts and the growth of ‘self-employment’. That might help to explain why despite a big increase in self-employment earnings have gone down. (See “The ‘self-employment’ conundrum” [2] ) Some of this ‘self-employment’ is bogus, imposed on people by the employee as a condition of the job. This is not the blossoming of would-be entrepreneurs that the government says, but people scrabbling about for bits and pieces of work to try to get by. So in the case of Swindon figures from HMRC show that the median in 2010/11 was £9,790. Hence 50% earned less than this paltry sum. The combination of ‘self-employment’ with zero hours contracts may be, in part at least, responsible for this decline in earnings.

Flexible labour markets

A long time ago a ‘son of the manse’ told us that “Employers rightly tell us that their greatest long-term need is a skilled, flexible labour force.” An associate of his who used to live next door to him once boasted that employment relations in the UK were some of the least restrictive in the world. Hence ‘the flexible labour market’ was one of ‘New Labour’s’ mantras. In the age of globalisation this was supposed to be necessary to make the country more competitive and in the words of Alistair Tebbit of the Institute of Directors “kept free of over-regulation”. It is workers rights that are deemed to to be ‘over-regulation’. Zero hours contracts are the ultimate version of ‘flexibility’. The worker must not only turn up when they are told, however inconvenient it may be to them or their families, but they must do whatever they are told, with the threat of no work hanging over their head like the sword of Damocles. All pretence that the ‘flexibility’ may be to the advantage of the worker has been abandoned. It as if the Master and Servant Act[3] had been reinstated. We will scarcely merit the term a ‘civilised country’ until these grossly exploitative contracts are banished. They help to create a climate a fear in the workplace.

Martin Wicks

April 24th 2014

[1]http://www.channel4.com/news/anger-at-amazon-working-conditions

[2]https://martinwicks.wordpress.com/2013/12/06/the-self-employment-conundrum/

[3]The 1823 Master and Servant Act described its purpose as “the better regulations of servants, labourers and work people”. Infringements by the employee were punishable before a court of law, often with a jail sentence and hard labour. It was entirely one sided, an instrument designed to stop the development of trade union organisation. The combination of employers which Adam Smith famously described had no legal restrictions on it.

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4 Responses to Zero hours contracts – promoting a climate of fear in the workplace

  1. […] wrote recently about ‘zero hours contracts‘. At the time we were awaiting an update by the Office of National Statistics on the […]

  2. […] as people have to take part-time and precarious employment, such as zero hours contracts (See “Zero Hours contracts: promoting a climate of fear in the workplace”) to avoid having to live on low benefits and be subject to harassment by the DWP and other […]

  3. […] of low wage and precarious employment, including ‘self-employment’ and the ubiquitous zero hours contracts. Even the CBI is worried about the impact on the economy of the decline in the value of earnings, […]

  4. […] stagnating wages and the growth of precarious employment, including zero hours contracts (See “Zero Hours Contracts – promoting a climate of fear in the workplace”. The latest HMRC data for earnings for Swindon is for the year 2012-13. Employment income for […]

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