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25 February 2015

Blacklists, exploitation and the mask of flexibility: the rise of zero-hours contracts

Zero-hours contracts have become the "norm" in many workplaces, but how can we avoid taking advantage of workers in the quest for flexibility?

By James Nickerson James Nickerson

“Zero-hours contracts are the most polarised of all the forms of contract we’ve got,” says Ian Brinkley, chief economist at The Work Foundation. “You’ve got cases where it works perfectly well and at the same time horrendous accounts of terrible exploitation.”

The rise of zero-hours contracts (ZHC) in the UK is no insignificant economic phenomenon: although it only represents a relatively small proportion of the labour market – at around 3 per cent there is currently estimated to be over a million zero-hours workers – they have been on the rise since before the recession, indicating a structural shift in the jobs market.

A ZHC is a contract where a person is not contracted to work any certain number of hours, and is only paid for the number of hours they actually work. In this situation, the employer has the discretion to vary employee’s working hours from anywhere between full-time to zero hours, giving a trade-off between flexibility and uncertainty of hours. This is why Professor Kim Hoque, Professor of Human Resource Management at the University of Warwick, says: “A significant degree of the benefits of these contracts are geared towards employers. The number of people on these contracts on a lifestyle choice is not that great.”

For University of Cambridge Lecturer, Dr Brenan Burchell, who specialises in the effects of labour market experiences, the appeal of these contracts to companies is apparent: “Companies are exploiting the current economic situation for their profit driven interests. If people could get better jobs with secure hours, they wouldn’t take these jobs.”

“A lot of people describe very harrowing situations that are driving them to tears, always worrying about their hours and work conditions. This can lead to a number of psychological problems including symptoms of anxiety and depression.”

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Poor working conditions have always alerted the Trade Union Congress. Indeed, their recent report added further injury, illuminating that workers on ZHCs earn nearly £300 a week less than permanent employees. “Businesses often use zero-hours contracts to drive down wages and change working patterns with virtually no notice, both of which cause stress and anxiety for staff,” General Secretary Francis O’Grady said.

Michael Yates, who works at Amazon in the day and Domino’s pizza at night, confirms this: “We don’t get notice. Someone will just abruptly tell you you’re going home or you will receive a phone call saying come to work now. As a family man zero-hours are impossible to live on: you never know how much you will earn, and I’ve done as little as 30 minutes on shift. And at Amazon, if you turn down hours you will be punished: they will withhold work from you.”

“My wife is at home with the kids, and we can’t afford for her to work as we would be much worse off. There is no planning, its hand to mouth. If I earn enough we go shopping, if not then the food bank is our only option.”

Withholding work as a punishment is not unusual on these contracts. Professor Hoque explains, “It’s a draconian method of management control over your employees. You get a great deal of compliance from the workforce with this sort of contract; people aren’t going to step out of line if there’s a distinct possibility they’re hours are going to have hours taken off them.”

The same experience has been had by Nicola, from South England, who would prefer to keep the location and company she works at anonymous from fear of the consequences: “You can get good pay if you get the hours. But often you get calls at 10pm asking to start a night shift at 10pm and you can’t really turn shifts down, because we get blacklisted if we do. We can get anything from 40 plus hours a week to four hours a week. It’s no way to live.”

“There is no sick pay either. If you’re ill, you either turn up or just ignore the phone to avoid the blacklist. It’s a constant struggle to manage my money, and I don’t have time for a personal life, as it is difficult to make plans and have to cancel them at last minute. Zero-hours are good for students who need flexibility but there is a difference between flexibility and taking advantage.”

Yet, British Retail Consortium spokesperson John Munro highlights that ZCHs are not necessarily negative for all workers. “Zero hours contracts can offer mutually beneficial flexibility. Students, for example, away at university might need to return to work during the holidays. Parents can also benefit from the flexibility as they juggle family commitments and colleagues moving towards retirement might see benefits as they begin to reduce their hours gradually.”

Aristos Georgiou, a postgraduate student and bartender at the Camden Head in London who is on a ZHC, sees these benefits: “I can work, within reason, when I want. I’m not tied down, and it’s been a life saver for me when it comes to organizing my work around my studies.”

However, another student, Helen McCullagh, an undergraduate student who works in health care in Northern Ireland, finds the situation more slightly more difficult: “While zero hours can be flexible, there are some weeks I don’t have any hours work and therefore no money, which can often leave me in difficulties for paying my bills. Zero-hours can be okay if you’re just working for extra cash, but if you’re relying on it for income it’s very difficult.”

In fact, surveys conducted by the Chartered Institute of Personnel and Development suggest that around 40 per cent of people find that ZHCs suit them, while another 40 per cent state they would rather have regular contracts. As Brinkley suggests, “If you’re looking at both employees and companies, if people are doing it out of choice and it helps them work more flexibility, then that is a good thing.”

Professor Hoque agrees, stating, “there’s nothing wrong with zero-hours if both sides agree to it. If employees need the flexibility to manage their lives, and there is an understanding on the parts of employers of that need it is beneficial.”

Whether good or bad, Professor Hoque explains these contracts are here to stay: “Once you’ve put people on zero-hours you’re not going to take them off them. They become embedded; it becomes a norm in the workplace. The problem is they shouldn’t become the norm. Thinking about McDonald’s, Sports Direct and others: they have just become the standard, despite the fact the companies could just put people on more conventional contracts.”

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