McDonald's offers zero hours workers fixed contracts, but a tide of insecure work is still sweeping Britain

While the fast food giant’s move is welcome, the TUC says 3.5 million will be trapped in insecure employment by the end of the next Parliament

James Moore
Chief Business Commentator
Wednesday 26 April 2017 10:56
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McDonald’s might be offering its zero-hours workers fixed contracts, but it'll take more than that to fix the growing culture of insecure work in Britain
McDonald’s might be offering its zero-hours workers fixed contracts, but it'll take more than that to fix the growing culture of insecure work in Britain

Its research, published this morning, reveals that there will be 290,000 more people in insecure work by the end of the next Parliament if current trends continue, bringing the total to 3.5 million.

It’ll take a lot more than even Maccy D’s – which says about 20 per cent of its zero-hours workers plan to take up the offer – to stem that tide.

It will take a lot more than even another horrible scandal like the one that engulfed Sports Direct over working conditions, to persuade some employers to behave a bit better.

Among less high profile firms, with less regard for their public image, exploitation continues unchecked.

To put it in context, the TUC’s 290,000 is equivalent to the entire working population of Sheffield.

Zero-hours apologists on the right usually say workers value the flexibility that the arrangement offers and it’s true that some do.

But as news reports, Parliamentary inquiries, and research like that of the TUC’s demonstrate, the flexibility is too often a one-way street in favour of the employer.

What if your children are on school holiday this week and you can’t find childcare? It’s on you to find a replacement, or you can sling your hook.

It is also worth noting that the rates of pay for those on zero-hours arrangements, or in its siblings, temp or agency work, are significantly lower than those enjoyed by full-time staff.

According to figures from the Office for National Statistics, the median hourly pay rates for workers on zero-hours contracts was just £7.25 in 2016. For the average full-time employee it was £11.05.

Worse still, the state often ends up subsidising such work through tax credits and other benefits. Lower rates of pay also result in lower tax revenues. The TUC puts the cost to the exchequer at £4bn annually.

It is true that the minimum wage is being increased, and that’s a welcome development. But even after the rises that have been announced, tax payers will still, in effect, end up subsidising exploitation. That’s frankly immoral.

While I wouldn’t go as a far as calling for an outright ban on zero hours, all those who work via that arrangement should at the very least be given the option of fixed-term contracts if they want as a matter of law.

They should also enjoy the same rights accorded to full-time staff.

Overtime rates should be made available for working hours outside their contracts, together with, as the TUC suggests, a written statement of the terms and conditions they will work under at the beginning of their employment.

Insecure work, the gig economy, the exploitation of loopholes and grey areas within employment law, have become depressingly common features of the British labour market.

Whatever the colour of the next Government, addressing these issues should be a priority.

It may be the case that only 20 per cent of McDonald’s restaurant staff took up the offer of fixed contracts for however many hours they work. But that still represents 23,000 workers who will now have a little more certainty in their lives (not to mention the ability to access a variety of financial services products that require proof of income). And the GMB union argues it could still do more over issues such as holiday pay and sick pay.

Others could and should fall into line. If they won’t do so voluntarily, then the issue needs to be forced.

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