Published on August 14th, 2013 |
by Eleanor Newis
Zero-Hours Contracts – What is Work For
Revelations around the previously “hidden economy” of zero-hours contracts has sparked a debate in the political sphere; as usual, however, not the right debate. On a zero-hours contract, an employee is paid the national minimum wage per hour, but given no guarantee of work and may have to wait on call to their employer. The crux of this, the bit that made even deflated business secretary, Vince Cable wince, is that zero-hours are exclusive contracts. So, rather than juggling their zero-hours contract around other work, an employee has to sit by the phone, or find out how much money they will earn that week when checking a rota. As the numbers mount up, from the initial 250,000 being on zero-hours contracts according to the official estimate from the Office for National Statistics, to the 1m of the Institute for Personnel and Development, the political pressure mounts too. Vince Cable has said that the government may legislate on the contracts, or at least he is “holding open the possibility that next month we could move forward recommendations to consult on legislation, but we haven’t got to that point yet.” Thanks for the clarity, Vince.
In deciding what to do with zero-hours contracts, Cable has to make a tough decision between a flexible labour market and humanitarian one. The Institute of Directors has said “countries with a flexible labour market tend to have lower unemployment and higher employment, and one of the reasons that the UK economy has not gone the way of southern Europe is because employers have been able to adapt swiftly to changing demand.” You might agree with this, but before you do I feel obliged to tell you that the IoD itself employs 200 staff at its London head office in Pall Mall on zero-hours contracts, plus 16 catering staff. Hardly unbiased economic council. Of course, there is an argument that a growing economy is good for everyone, and will bring more work hours. If flexibility achieves this, the logic goes, it should be encouraged. But this is where we get to the real debate. If our sole aim as an economy is growth, then surely deregulation must follow? But is that our sole aim? To paraphrase a key question: what is work for? When reviewing zero-hours contracts, this is the question Cable should be asking himself.
There is of course, as with so many political issues, a theoretical answer and a practical answer. Whether you read Keynes or Smith, the point of work is broadly the same: we need work because we need a moving, functioning economy. But the practical answer is different. People in the UK don’t work because they think that Keynes or Smith or – fortunately – David Cameron all argue they should. They work to feed their families, pay for holidays, go to the cinema, and buy music. Surely, work is for all these things too? For once, Labour at least seems to be able to form not only a coherent sentence, but also a telling one. Chukka Umunna, shadow business secretary, said “zero-hours contracts are making hundreds of thousands of people worried about whether they will have enough work or be able to put food on the table for their children week by week.” The zero-hours contract is questionable not because it is morally corrupt, or mean, or odd, but because it fulfils the theoretical answer and not the practical one. The very concept of a contract where the employer holds all the cards is born out of economic, not humanitarian reasoning.
Flexible working hours must be acknowledged as an important part of an economy, especially a recovering one. But there is a difference between flexible working hours and a zero-hours contract. Employers like McDonald’s, with 82,800 zero-hours employees, JD Wetherspoon, with 24,000 and intriguingly Buckingham Palace, with their 350 summer staff prefer these contract because they offer employer flexibility. These employers operate easier with a lot of staff available, to be called on when needed. Keynes once used the metaphor of digging holes to explain the importance of work. He wrote that you could pay people to dig holes and fill them back up again; all that mattered was that they were working, the economy was moving. Well, what employers like MacDonald’s, JD Wetherspoon and Buckingham Palace are doing is effectively employing three people to dig one hole. Except that these three people don’t know which one of them will dig the hole, and they won’t dig – excuse the pun – a whole hole. They are being employed this way so that the employer can be sure the whole will be dug, as three people are ready to call on rather than relying on one.
Oh, and these three hypothetical people can’t dig holes for anyone else. Personally, this is the part that concerns me. Granted, flexible employment should be part of a modern economy, and though I don’t like the idea of three people being employed to dig one hole, I can at least understand the motivation for the employer. But what on earth is behind the Draconian measure of an employee being bound to the provider of their labour is beyond me. It is this aspect of the zero-hours contract that really proves it is for employers: flexible employment meaning flexibility for MacDonald’s, JD, Wetherspoon and Buckingham Palace. You might support the rights of Buckingham Palace to be able to call in serfs at a moment’s notice, but surely you would also at least allow the serf to work at the neighbouring mansion as well? The balance of power in a zero-hours contract illustrates that increasingly, in a post-recession climate, that the relationship between business and their staff has altered, and some would say regressed, considerably. The economy is growing, albeit slowly, but in moving forward with economic growth we must not forget that for all the theoretical, societal benefits of work, there is a personal argument behind it. In rebuilding our economy we must rebuild it to favour movement and progress, but we must not forget to make sure it also favours security and humanity.