Daewoo hires on zero-hour contracts

The Korean car company Daewoo is following in the controversial footsteps of Burger King and employing people on "zero-hours" contracts.

The group is setting the new terms, which do not guarantee work or pay, under arrangements to meet its commitment to service its vehicles free for three years.

The Labour Party has indicated that it may outlaw zero-hours contracts after accusations that Burger King was exploiting some young staff by making them stand around unpaid until customers came into restaurants.

Daewoo, which began to sell its vehicles in Britain only two years ago, wants staff on such contracts to collect cars from customers and deliver them.

The company intends to attract "mature" people who have finished full- time employment and who are "available" for work, but who are not necessarily anticipating it. The Daewoo chairman, Woo Jung Kim, has reputedly never taken a day's holiday in his life and enjoys a reputation for expecting his staff to work hard as well.

Ian McCartney, Labour's employment spokesman, called the arrangement "iniquitous".

"The most important asset of any company is the commitment of employees, especially businesses who are emphasising customer care. We are consulting with the social partners to see how best people can be protected from such contracts," he added.

In an interview with the magazine Personnel Today, Peter Ellis, human resources director at Daewoo Cars, said that meeting the company's servicing obligations required a lot of support, "and we do not want people just standing around. We are looking at a lot of zero-hours contracts".

The names of the staff would be listed at each dealership and they would be contacted when needed. They would be rewarded pro-rata on the same basis as other employees but would be need to be flexible about when they worked.

The Burger King chain attracted considerable criticism for a similar working arrangement and paid pounds 106,000 in compensation to nearly 900 employees who were asked to clock off during slack periods. Unions believe zero- hours contracts are increasingly common, especially in the service sector, to meet peaks and troughs in business.

A spokesman for Daewoo yesterday conceded that the issue was a "tricky one", but said the group saw the arrangement as of benefit to staff."Because of our emphasis on the customer, we find that full-timers are often tied up, so we need people to work on an ad hoc basis," he said. "I don't see this as exploitative. We see it as a benefit. A lot of mature people don't want to work full-time. It could also be of interest to students."

The spokesman said the arrangement was different from that at Burger King because staff would not be expected to be on the premises waiting for work.

Mr Ellis said yesterday that there would be only an "occasional" requirement for people on zero-hours contracts and they would normally be expected to work only an hour in the morning and an hour in the afternoon.

"I don't understand what the fuss is about," he said. Only seven people had so far been employed in a "mutually beneficial arrangement". There was not enough work for full- or even part-timers, Mr Ellis added.