Where are zero hours contracts and the gig economy taking us?

gig-economyZero-hours contracts have had a bad time in the press. Mike Ashley, founder of Sports Direct, has taken a pounding after uproar over workers conditions, and after vehemently defending his position, he is remarkably making a U-turn, ditching the controversial zero-hours employment arrangements. A large number of companies new also turning their backs on zero hours, including Cineworld, Greene King and Wetherspoons. Casual work isn’t a new phenomenon. In fact, the secure, jobs-for-life of post-war Britain lasted merely a few decades. Prior to the 1940s casual work was the longstanding nemesis of the working class. The welfare state and the much-cherished political mantra of full employment emerged in a post-war, golden age. In the 1980s capitalism found its sway. Margaret Thatcher redefined worker’s rights, and it paved the way for employers to benefit again from a more flexible workforce and ultimately what we now refer to as the gig economy.

The rise of the zero-hours contract is a response to modern capitalism, and recent governments’ attempts to scale back the welfare state have left workers with little choice other than to go with the flow. It explains the success of the UK’s unemployment figures, but one needs to consider the question, is it fuelling poverty for the low-paid worker? Digital capitalism, driven by consumers, is creating a disempowered, on-demand workforce for an on-demand world. The gig economy has arrived, and there’s an unrelenting pressure for it to stay.

What is a gig economy?

The phrase ‘gig economy’ describes an environment where people make a living by ‘gigging’ or working in several part-time jobs. Gig work was originally a reference to the jazz musicians’ working arrangements in the 1920s.

What is a zero hour contract?

The zero-hours contract normally refers to a working arrangement where the employer is not obliged to offer any hours and the employee is not obliged to accept any hours either. It’s a flexible contract. There are no guaranteed hours, sick pay, pensions, parental leave, redundancy entitlements or notice periods. Workers are still entitled to the minimum wage and statutory annual leave.

Zero-hours contracts – the facts

  • There are more than 900,000 workers in the UK on zero-hours contracts.
  • Zero-hours contracts are widely used by retailers, restaurants, hotels and the leisure industry.
  • According to the latest labour force survey carried out by the Office of National Statistics more than 36% of zero-hours contracts go to those aged 16-24.
  • The Office of National Statistics also reports that over 20% of people on zero-hours contracts are in full-time education.

The disadvantages

The biggest problem with zero-hours contracts is unpredictability for the employee. While it suits business to expand and contract efficiently according to the market, it’s impossible for workers to budget financially with any certainty. There’s also the question of being ‘on-call.’ It’s not conducive to planning ahead. With financial stability at risk, it’s hampering a healthy work-life balance. According to some commentators it’s adding to a sense of vulnerability and anxiety, and is being felt in a growing low-paid, and undervalued workforce.

There’s been much talk of the Sports Direct employment policies, which punished its workers for minor infringements and supported a culture of bullying. When workers are reliant on bosses for handing out hours, making complaints about being poorly treated tends to be buried for fear of discrimination.

While the disadvantages of zero-hours contracts loads heavily on the side of the employee, the recent U-turn by some of the big players indicates a nod towards the old adage that reputation is good for business. Reputation it seems for once is falling on the side of the employee.

Are there any benefits?

While the zero-hours contract conveniently benefits employers’ wage bills, along with workforce flexibility, there are some workers who also benefit. Students, elderly workers in semi-retirement, and adults juggling childcare, relish the opportunity to work on an on-call basis. It’s a flexibility that they can’t get in other forms of employment. It’s also an opportunity for young people to easily get employment experience and skills, and for an increasingly elderly population to remain engaged with society.

The verdict

The Pros and Cons of the zero-hours contract is a much debated topic, and the verdict puts the benefits pretty much in favour of employers rather than employees. There are, however, rumblings of a changing tide. New Zealand’s government passed legislation in March of this year, banning the use of zero-hours contracts. UK companies are listening and some are heeding the change in mood. The success of British business in supporting an increasingly fragile post-Brexit economy cannot be undermined, but redressing the balance in terms of worker’s rights is a sensible approach. There are positive signs of some change.

There’s currently a surprising lack of kick-back from the growing pool of gig workers. It’s a concerning feature of our increasingly disenfranchised society. The Brexit vote is perhaps proof of the pudding. While there are rumblings of a change by employers to the zero-hours contract, one has to question whether it’s just a rehash to quell the recent uproar. With no sign of a move towards gig workers collective bargaining, employers continue to have the upper hand. Flexible working is most definitely here to stay, but employers beware. Historically, the low-wage, insecure workforce have ultimately challenged to safeguard employment rights. Could it be that the balance is about to tip?

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mike-jamesMike James is a commentator on workplaces issues for Planday.

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