Time to tackle the controversy of zero hours contracts

NORMAN Pickavance became a familiar figure in the business world during his time as head of human resources at Yorkshire supermarket giant Morrisons.

Less happily, he also had a spell as chairman of Create, the Leeds-based restaurant and social enterprise that collapsed earlier this year. Now, however, Mr Pickavance has a new challenge.

He has been chosen by Ed Miliband to chair an independent consultation into one of the country’s hottest political issues – zero hours contracts. Mr Pickavance will be holding talks with business groups about the Labour leader’s plans for ending the “exploitative” use of the contracts.

The three key measures put forward by Mr Miliband at last week’s TUC conference in Bournemouth were banning employers from insisting zero hours workers be available even when there is no guarantee of any work; stopping zero hours contracts that require people to work exclusively for one business; ending the use of zero hours contracts in cases where employees are working regular hours over a sustained period.

“For many people, zero hour contracts are the cause of extreme anxiety,” says Leeds West MP Rachel Reeves. “No guaranteed income means uncertainty over paying bills and rent and can leave workers unable to plan for the future through pensions and savings.

“For some workers, like students, extreme flexibility can be beneficial. It allows them to fit the odd piece of work in around their studies. But it can’t be right that there may be as many as 5.5m people working in such an arrangement.”

That figure was the stand-out finding from research conducted on behalf of the Unite union last month. It also found that the average wage of a person tied to one of the deals was £500 per month.

Karen Reay, Unite’s regional secretary for Yorkshire, Humberside and the North East, said: “The Government’s refusal to address the growing scandal of zero hours contracts is creating a growing sub-class of insecure and low-paid employment. It is a growing scandal that is denying workers access to mortgages, renting a home and even getting a mobile phone.”

That is, clearly, only one side of the argument. However, some employers like the contracts because they allow them to take on staff in response to the kind of shifting demand for services that can be found in tourism, hospitality and other sectors.

One company that reputedly has a soft spot for zero hours arrangements is retail giant Sports Direct. Reports over the summer suggested that 90 per cent of the company’s workforce – around 20,000 part-time staff – were on the contracts.

Yet Sports Direct is far from the only organisation to have gone down the zero hours route. It is estimated that more than 300,000 adult social workers in England are on the contracts. One report has claimed there are almost 100,000 zero hour deals in use in NHS hospitals.

Speaking about the benefits that the contracts can bring, Neil Carberry, director for employment and skills policy at the Confederation of British Industry, said: “Flexibility in the workplace, such as zero hours and agency working, creates opportunities for those who find it hardest to break into the jobs market, including young people and parents.”

The Government line on the issue is a little less clear-cut. It says it does not want to restrict people’s ability to choose the hours they work and points to the flexibility – that word again – which can go hand-in-hand with zero hours life. At the same time, though, concerns exist about possible abuses of the system and a review, headed by Vince Cable, is now under way into how contracts are being pressed into service in modern-day Britain.

Stuart Andrew, Conservative MP for Pudsey, Horsforth and Aireborough says: “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.”

The game of catch-up has, in some respects, already begun, with the launch of Vince Cable’s review and Ed Miliband’s consultation. Mr Cable was first out of the blocks and is due to be given the findings of his officials later this month. Supporters and opponents alike will be waiting and watching for his response to them.