Are zero-hour contracts good for the economy but bad for society? Or are they simply bad on both counts?

Zero-hour contracts are presently a topic of much political discussion and all the political parties are coming at them from different angles. Ed Miliband has made it clear that they would be one thing that would change if Labour comes to power. It seems that the Lib Dems, even though they are part of the coalition, also have concerns, given that one of their senior politicians, Business Minister Vince Cable, is carrying out a review of these contracts. On the Conservative side, they like the flexibility that zero hours contracts can give businesses and the route they can provide for getting people back into work. What is sometimes forgotten in the midst of all this political debate is the impact that the contracts can have on the people employed on them.

The idea that zero-hour contracts can help people into work does have an element of truth to it. They have some positives that include allowing managers the flexibility they need to cope with peaks and troughs in workload. They can give employees the flexibility they need to manage the demands of work and home life. They can be argued to benefit both employer and employee but recent public debate has begun to question the true cost of such contracts.

Critics maintain that people working zero-hour contracts too often lead an uncertain and insecure existence. Such people do not necessarily know what, if any, hours of work they will have in any particular week. This can undoubtedly create difficulties for family life and the planning of child care and other care responsibilities. These contracts can negatively impact on leisure time and family life. The path to full time hours is not guaranteed and is not always smooth. Uncertainty and insecurity are, critics maintain, the costs people pay for this kind of work. They can create insecurity and uncertainty in the workplace and provide conditions where exploitation can occur. Undoubtedly some people can cope with, as well as potentially thrive on this uncertainty. However, for others zero-hours can be a source of stress and can negatively impact on mental health and general well-being.

The benefit system works well if you are in a full-time, permanent job, but comes up short for some people in a zero-hours situation. The benefit system can cope with certainty but it does not always work as well as it could when dealing with the complexities of the zero-hour world of work. Looking to the future it is interesting to speculate how the new benefit system of universal credit will work with those people on zero-hour contracts. Will universal credit be flexible enough to adapt speedily to people’s changing hours of work and changing pay levels? Universal credit may well bring more chaos and increased uncertainty around pay and benefits for those employed on zero-hour contracts. As always, the devil is in the detail and the hope must be that the new system of universal credit will be flexible enough to deal with the complexities of today’s world of work. If this is not the case then it is reasonable to suggest that the cost will be borne by those least able to afford it. This scenario cannot be good for either the economy, society or the individuals likely to be adversely affected.

In whose interest do zero-hour contracts work? Who loses and who benefits from their use? Evidence needs to be gathered to make the case for change and policy needs to play catch up and changes made to minimise opportunities for the worst cases of zero-hour exploitation.  New policies should emerge that should allow people to have the flexible work that allows them to lead flexible lives. How to deliver on this is an open question and subject to public debate.  New routes and pathways into work should be developed that can help people manage the demands of home life and the demands of work. As many know, juggling both can be something of an art and people need to be supported by policies and practices that work for them.

Dr Brian Jones

Senior Lecturer / Leeds Business School

Brian joined Leeds Beckett University in 2004 as Senior Lecturer in Marketing. Since joining Leeds Beckett University Brian has been engaged in teaching and lecturing, academic and applied research, funded projects (e.g. Erasmus plus) and consultancy (e.g. ERDF).

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