Stuart Neilson, Employment Partner at Pinsent Masons, comments on the Office for National Statistics’ zero-hours contracts report and Labour’s recent decision to oppose their use in the UK.
The ONS report highlights the difficulty there is in ascertaining with any certainty both what is meant by a “zero-hours” contract and how many people may be subject to such contracts.
Last week Ed Miliband put forward proposals for dealing with what he suggests is an “epidemic” of zero-hours contracts. Whilst the issue of zero-hours contracts is something which engenders a lot of lively debate and where clearly there are examples of abuse taking place – it is a difficult area to effectively legislate for two key reasons.
Firstly, is it possible to effectively legislate where there is no real certainty around what we mean by zero-hours contracts? Does it cover all casual employment or other more informal arrangements or is it only to cover those working on “regular” zero-hours arrangements?
Secondly, is there a risk that any legislation will have unintended consequences – in that it may effectively discourage employers from engaging employees on a casual basis for more than six months or 12 months? The ONS report has highlighted that there are disproportionate numbers of women, students, under 25’s and over 65’s on “zero hours” contracts. These groups may find it more challenging to obtain regular employment.
In addition, whilst there may be particular sectors of the economy where abuse of so-called zero-hours contracts is thought to be occurring – particularly with low skilled and poorly paid occupations – the impact of any legislation is likely to be felt more widely and could impact upon sectors where flexibility is highly prized by both employers and employees, and where skills shortages are the primary concern such as in the engineering and construction sectors.
The aim might be a laudable one but legislators need to make sure they can provide very targeted and specific legislation and that it will achieve the aims the politicians want it to without causing greater drawbacks for both employers and employees