There is growing concern over the number of zero hour contracts in use within the UK as the Office of National Statistics’ assessment of 250,000 contracts is considered to be incorrect, with the real number of such contracts being closer to 1 million.
Whilst 1 million such contracts still only represents a small proportion of the UK’s workforce, Vince Cable is to undertake a review of them to determine their validity and fairness. So what seems to be the problem?
A zero hour contract is a contract of employment that governs the relationship between employer and employee (as does a ‘normal’ contract) but it confirms the contractual working hours as ‘zero’ as a minimum. This means the employer has the capacity to require the employee to work full time hours, or zero hours, or anywhere in between.
The employer really is in a strong position to deal with market trends as it can reduce the amount it pays as a labour cost to zero with little or no notice. The employee however is in a difficult position as he cannot predict or control his income from one week or month to the next. There is also a risk the employer can use the contract as a reward or bonus, both of which are outside of its original purpose. If the employer perceives the employee to have done well, then he can be rewarded with increased hours or hours that suit. The concern of course is that if the employee’s manager takes a disliking to the employee, then the manager can reduce the employees hours down to zero leaving the employee with no protection from a sudden drop in income. In that respect the contracts are unfair and with the job market being slow and difficult, I say zero hour contracts ought to be ruled out as an option as they provide too much power to employers who seek to benefit from a prospective employee’s desperation to find and retain a job.
We will have to wait for Vince Cable’s report on the subject but I think legislation will be brought in to rule them out or have zero hour contracts regulated to at least provide a minimum period of notice for any reduction in working time.
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