Zero-hours contracts aren't as pernicious as you think they are

Imposing a ban and forcing a move towards regular working won't solve anything

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The Independent Online

When two of my children were at university they had jobs with zero-hours contracts – working in hospitality for the local football club. Did they complain? Not a bit.

It’s true they would have liked to work more hours, but they also understood there were only so many fixtures and events at the stadium, that not all the corporate boxes and dining rooms might be required; and they appreciated it was up to the club when they would be needed.

Yet something designed to give the employer flexibility and the employee a degree of certainty that if the demand was there they would be called upon has become the subject of revulsion by Labour and used as a stick to beat big business  (and its Tory friends) during this general election campaign.

In a sense, my children’s contracts were not worth the paper they were written on – the club was guaranteeing nothing. They, on the other hand, were providing security to the club that, if prevailed upon, they would be available. If not, the contract would end and the chance of employment as a waiter in one of the hospitality boxes or lounges would go to someone else.

But the contract did serve a purpose: without them, the club would have to enter the job market ahead of every game and find hundreds of candidates. With them, my children had a degree of certainty – they were able to look at the fixture list and calculate when they were likely to be needed. And the contract acted as cement for a relationship between the club and them.

Now I know that their contracts are not the ones about which there has been so much anger. But in its attack, Labour is not making any distinction. Ed Miliband has vowed to abolish all zero-hours contracts. There is, he maintains, an “epidemic” of them. But he is ignoring the truth. According to the Office for National Statistics, about 17 per cent of those on zero-hours contracts are full-time students, like my children.

As for this supposed plague that is sweeping the land, the ONS has conducted two surveys. One, of households, found that 697,000 people were employed on zero-hours contracts between October and December last year.

The other, of employers – 5,000 took part – concluded there are 1.8m zero-hours contracts in Britain. These studies, however, come with health warnings: the first is flawed because people may simply not know that their contracts are zero-hours or understand the wording; the second may be wrong because people may have more than one zero-hours job.

Even if the second is correct, it would mean that around 7 per cent of the workforce was employed on a zero-hours basis. Does 7 per cent justify Miliband’s near the top of the agenda billing? Well, he may have a case, in that it would appear the number of zero-hours contracts is growing – up 20 per cent in a year says the ONS. But it’s possible part of that increase is the result of the publicity surrounding the arrangement.

According to Labour, zero-hours working is cruel and exploitative. Those working on the contracts are unable to plan ahead, and have no idea from one week to the next how much they will be bringing home. In some weeks, they may earn nothing at all. That is undoubtedly so in some cases and it’s true that the ONS found that one-third of people on zero hours would like more work. But that still leaves two-thirds who are quite content with their lot. Likewise, only one in 10 on zero hours would like a different job – so not much misery there.

Labour ignores, too, that zero-hours working is a favourite tool of local councils, not just companies, including those run by Labour. The party’s MPs, too, are also fond of employing people on these casual terms. All of which points to Labour taking a hammer to crack a nut. I know that some people on zero-hours contracts are abused and consigned to eking a living at the mercy of an uncaring employer. Such suffering exists. But to say that all zero-hours contracts are bad is an over-reaction.

Labour has form in this area. The party adopted a similar stance on payday loans, conveniently ignoring the fact that for many borrowers the payday loan enabled them to gain access to cash they could not obtain elsewhere. Again, it was the greed of business (and by extension its Tory pals) that was to blame.

Labour wants to give zero-hours workers who have done regular hours for three months the right to a permanent contract. This pays no regard, however, to the flexibility that zero hours affords an employer. Meanwhile it’s argued that casual workers receive little training, and this may lie behind the UK’s weak productivity record. Really? At most, only 7 per cent are on such deals.

Zero-hours contracts are not new. But they are on the increase, a symptom of Britain shifting towards being a service economy – most zero-hours contracts are to be found in catering, support services, health and education. They tend to be concentrated, in short, in areas where demand ebbs and flows; where employers may require more workers, and want them immediately.

That may smack of being one-sided – of suiting the employer’s requirements rather than the worker’s. But imposing a ban and forcing a move towards regular working will not solve anything. Employers will find a way around the problem; they always do. In the meantime, workers will be denied the work that even zero hours can bring.

More concerning for those managing the economy – and that soon may be Labour – should be our low productivity. Zero hours could be partly responsible – but only partly. Removing this form of working entirely will solve very little, and will only create more problems.