By ELAS’ Head of Consultancy, Peter Mooney
The prolonged and improper use of zero-hours contracts by small businesses will erode employee confidence and foster feelings of inadequacy and mistrust, all of which could irreparably damage the UK economy.
In some instances, zero-hours contracts provide a way for businesses to rule with a rod of iron, without taking heed of established employment law practices. The sad truth is that they are increasingly being used wrongly, which is only adding fuel to the ongoing controversy surrounding them.
This is because zero-hours contracts are capable of exploiting employees when it comes to finding stability in both working hours and earnings. Taking the decision to use them can result in underpaid, undervalued and under-motivated workers who are not engaged with the job in hand, which are detrimental traits for any company that wishes to be profitable and successful.
It is therefore of real concern that some businesses are offering zero-hours contracts in general, rather than in specific circumstances where they work for both the employer and employee.
Zero-hours contracts allow firms to hire staff without any obligation to guarantee a minimum number of working hours and also give companies the right to instigate a period of temporary layoff without pay when there is a shortage of work.
They are proving popular among employers because they offer a cost-effective and easy solution to staffing issues and managing resources in line with fluctuating customer demand and they indeed have their place in the employment market, but only when employed in the proper manner.
They are, for example, used widely by retailers, hotels and in the social care sector and are ideal for providing cover for industries that rely on 24/7 cover and an ‘on-call’ pool of staff to meet those needs. This is why zero-hours contracts offer a vital, flexible resource for businesses that need back up should an emergency arise and those employers that have a genuine need to use zero-hours contracts should do so by all means.
They are definitely not appropriate, however, for small businesses that require staff continuity in order to operate to maximum efficiency and capacity. This is because they do not assist job security or growth or, most importantly, foster staff loyalty.
This could improve extremely damaging when it comes to shoring up a thriving and committed workforce that will ultimately help to forge a strong economy for years to come and this is why this issue must be addressed as a matter of urgency.
The good news is that the Government is in the midst of consulting on the future of zero-hours contracts, with this likely to recommend a ban on so called ‘exclusivity clauses’, which prevent employees from working for another organisation. Steps like this are crucial when it comes to planning for and building a fluid and responsive labour market that we are proud to call our own.
The Employment Law Advisory Service (ELAS) is a leading provider of business support services such as HR, payroll services, DBS checks, employment law advice and social media training to businesses both in the North West and nationally.