Zero hours contracts have seen increasing attention since the introduction of their current iteration in 1998 to become one of the most divisive debates of 2013. While the term has become an attention-grabbing hook, there exists a disconnect between what the term stands for, what the arrangement constitutes and who and how many people are currently working under zero hours contracts. Employment4students spoke with universities and students to shed some light into the term and what they mean to the group most often touted as benefitting from the contracts.
Definition
Loosely, a zero hours contract is an “on-call” arrangement between an employer and worker whereby the worker agrees to be available for work as and when required. No set hours or times of work are established. Within this the employer is not obliged to provide work for the worker, nor is the worker obliged to accept any or all work offered, although this may be subject to the particulars of the contract. Beyond this, zero hours contracts do not have a strict legal definition and are therefore subject to some variation.
Much of the discussion around zero hours contracts is focused around workers rights. Astute readers will note that E4S has thus far avoided describing people under zero hours contracts as “employees” and there’s a reason for our caution: they aren’t. Technically classed as workers, staff on zero hours contracts are given a contract of service, not employment and as such do not receive the same rights as employees or staff on traditional contracts. Zero hours workers should still receive statutory sick pay (if they earn at least £109 prior to tax per week), holiday pay and the national minimum wage. However workers do not receive maternity, adoption and paternity leave, statutory redundancy pay or protection against unfair dismissal.
However, without a firm legal definition, the distinction between a worker and employee on zero hours contracts can be difficult to confirm. A House of Commons briefing paper adds to the confusion and marks the words on the contract as not exactly worth the paper it’s written on:
“When deciding whether a zero hours contract constitutes a contract of employment, conferring employee status, the wording of the contract will not be determinative of whether there is, in practice, a mutuality of obligation. The tribunal will look closely at the reality of the agreement. If the reality is that there is a pattern of regular work which is regularly accepted, the tribunal may deem the contract to be one of employment.”
Benefits of zero hour contracts for students
Students are the demographic most often cited as benefitting from zero hours contracts. Sources as disparate as telemarketing agency Pell and Bales chief executive Derwyn Jones to Endsleigh blogger Patrick Taylor have opined on how the flexibility of such arrangements are suited to students and spoke on the benefits:
- Students can ease or increase their work schedule according to exams or coursework deadlines.
- You’ll be able to accept work placements or go travelling without the obligations of a part-time job, nor will you have to give up your job.
- Zero hours work can help fill gaps in your CV between university and full-time work.
- Certain sectors popular with students including hospitality and leisure – festival work or bar staff – that cannot ensure a regular working schedule are more inclined to employ students.
These generally relate to time management, offering the flexibility to explore the social, professional and working experience around university. With this in mind, it is no surprise to discover that students make up 25 percent of the working population on zero hours contracts.
Benefits of zero hour contracts for employers
Many employers also favour zero hours contracts, allowing for a ready stock of flexible on-call workers that can respond to busy periods on short notice. The phrase “keeping a bank of workers” frequently crops up in reportage, often with negative connotations although apt in its description. Business groups and think tanks have also held zero hours contracts as a principle barrier against the effects of recession, with Michael Burd, joint head of employment at law firm Lewis Silken, claiming that countries where businesses are hesitant to hire staff such as Spain and Greece are envious of the arrangement.
Drawbacks of zero hour contracts for students
However criticisms include instilling insecurity and concern among staff. Stories of exploitation are commonplace and numerous people have spoken on poor working conditions, poor management and a lack of rights attributing to a detrimental working experience and atmosphere.
- Used as a management tool: workers feel compelled to take all shifts made available, avoid speaking their mind or joining unions for fear of being left out of shift allocation.
- Zero hours contracts are often employed in lieu of setting up part-time contracts or agency work in a bid to circumvent the associated employee rights and fees. These are two areas of work commonly filled by students.
- With less rights than employees, workers on zero hours have claimed working conditions can be vastly inadequate and expectations unreasonable. Sports Direct and Amazon have recently been accused of both.
- While contracts allows for flexibility, there is no guarantee that you’ll receive enough hours.
A University of Leicester student who chose to remain anonymous spoke with E4S on their experience of a zero hours contract with a Norfolk college. The position apparently required them to be available on full time hours for three weeks. However they received one-and-a-half days training and only four days work before being immediately terminated. They also claimed poor working conditions.
Who are on zero hours contracts?
The number of people believed to be on zero hours contracts varies from 250,000 to as much as 5 million, and 17 percent of private sector employers have workers on the controversial contracts. Care staff, county council workers and university lecturers have been revealed as prime positions for zero hours contracts, as well as fast food outlets such as McDonald’s, Burger King, Subway and Domino’s Pizza.
Far from being an issue that has only affected employment for the last year, zero hours contracts have been utilised for decades, and typically in sectors that see significant student employment: retail, healthcare and hospitality. However there is no denying that there has been a sharp increase in recent years. According to the British Labour Force survey the number of workers on zero hours contracts rose by 25 percent throughout 2012, and more than 150 percent since Q3 2005.
The Financial Times recently noted how zero hours contracts are usually adopted by “sectors that are low skilled, not subject to international competition and where employers compete primarily on cost” – often jobs where students typically find work. However highly skilled professionals including journalists, doctors and lecturers are also beginning to be placed on zero hours contracts.
The future of zero hour contracts
Speaking at the Trade Union Congress on 3 September, Labour leader Ed Miliband has pledged to “stop flexibility being used as an excuse for exploitation”, and has proposed banning employers from insisting on worker availability when there is no guarantee of work, as well as outlawing exclusivity contracts that restrict workers from joining other companies. Perhaps most importantly, Miliband claimed that he would look to arrangements where workers receive regular hours over a sustained period of time.
Liberal Democrat Business Secretary Vince Cable also spoke on clamping down on abuse of the arrangement at the Liberal Democrat conference in Glasgow: “It is clear that there are abuses in the system, especially around the issue of exclusivity which some employers are demanding from workers on these contracts. I am determined to make sure people are paid and treated fairly, while helping to keep people employed in these delicate economic times.” However Cable ruled out an outright ban on zero hours contracts, stating that they are suited to a number of occupations and announced a consultation on tackling abuse, particularly targeting exclusivity clauses in contracts.
While few would argue that the arrangement and opportunities for exploitation around zero hours contracts is in dire need of addressing for the majority of workers, do students, appealed by the flexibility, stand to lose out should Miliband’s desire to see more regulation and regulated hours become enforced? One thing remains certain: zero hours contracts look like they’ll remain a significant part of the UK employment market.
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