Zero-hours contracts have been making headlines recently, with the news that many more people may be on them than official statistics suggest.
Under such contracts, employers do not have to offer any actual work - and employees do not have to accept any work offered. However, employees are expected to be 'on call' in case they are needed, may need to get written permission to work elsewhere, and are not automatically entitled to sick or holiday pay. New figures also show that workers on zero-hours contracts earn an average of six pounds per hour less than other employees.
The unpredictable nature of zero-hours contracts, the lack of benefits, and the power they give the employer to withhold work has led to them being widely criticised. Companies under fire for using them include Sports Direct, McDonalds and even Buckingham Palace. Vince Cable is reviewing the contracts, and some politicians are calling for a ban.
However, many have defended the contracts, with a spokesperson from the Institute of Directors arguing that in the current economic climate, zero-hours contracts make sense for businesses as they allow them to be adaptable. The flexible nature of the contracts has been cited by companies as a major reason for keeping them, and it's been pointed out that the arrangement can suit some employees very well. This article in the Independent argues they can be vital for small businesses getting off the ground.
I can see the issue from both points of view, and the debate seems to have polarised with the solution probably being somewhere in the middle. I certainly don't think that zero-hours contracts should be banned outright.
However, at my company, The Clean Space, nobody is on a zero-hour contract, despite them being extremely common in the cleaning industry as this list of vacancies shows. All our PAYE cleaning staff are given contracts that guarantee them a certain number of hours on a particular job. This is part of our commitment to fair treatment of staff, an issue I have written about before, and my reasons represent principles that in my opinion should be stuck to by any responsible business.
First: if you know how much work you need doing, you don't need zero-hours contracts. My company gets contracts from clients requiring a set number of hours' cleaning, so it would be impossible for me to claim that I don't know how many cleaners I need. I believe this is also true for many businesses currently using zero-hours - for example I find it hard to believe that large companies don't know how much work needs doing or can't predict changes in demand. I've talked about the importance of transparency and trust, and this issue is part of it.
Second: contracts should be appropriate to the employee's circumstances. If your worker has other means of support to fall back on, a zero-hours contract may suit them. However, if they are a key breadwinner, there is evidence to suggest that their wellbeing can be negatively affected. The uncertainty of hours means a person may be unable to arrange childcare, plan the monthly budget, never mind save for a pension. All this causes stress - for example, a former zero-hours employee of Sports Direct is taking legal action because financial insecurity left her suffering panic attacks. No business can be proud of a workforce that feels anxious, undervalued and desperate to get away - conversely, if your staff's needs are met by their contracts, they will reward you with hard work and loyalty.
Third: flexibility works both ways. An employee-employer relationship is just that - a relationship, and these can never flourish when one party has too much power. In theory, employees on zero-hours contracts can turn down work, but in practice few do so because it can lead to them being punished with reduced hours as employers exploit the power of these contracts. I believe businesses expecting flexibility from their employees need to show some flexibility themselves, and not penalise their workers for having a life. At The Clean Space we offer flexible working with contracted hours, and the result is happy and productive staff.
Businesses should ask themselves if they truly need zero-hours contracts or whether they are using them as a way to have their cake and eat it. Aside from anything else, I recommend businesses listen to the outcry about the abuse of these contracts and ask themselves if they want to continue with something that could put customers off - especially in the light of the latest Mood of the Nation survey which suggests consumers care about the ethics of companies.
According to our sales staff, our clients aren't keen on zero-hours contracts - and we are proud to respond that we don't use them. For me, it's another important part of a responsible approach to business.