Labour’s lessons on Zero Hour Contracts: Review of IER Booklet

From political rhetoric to meat on the bone: Zero Hour Contracts and their context

 

REVIEW:
Re-regulating Zero Contracts By Zoe Adams and Simon Deakin
Institute for Employment Rights

 

The rise of Zero Hour Contracts (ZHC) as a political concern raises an old question: Does reality meet the rhetoric? The business lobby and their friends will say no (as the CIPD has done). This encouragingly sober, and refreshingly concise, examination by a prominent academic labour lawyer and his protégé points to clear answer: YES – the ‘extreme flexibility’ ZHC provide employers can be highly exploitative and creates ‘highly precarious’ forms of work. There are however two key further points that emerge from reading this IER pamphlet. The first is that the entrenched and wide-spread use of ZHC has created pressures on firms to use them when perhaps they would be inclined not to (something also aided by the regulatory system). The second point, relating to the politics of ZHC, is that the authors titled their pamphlet re-regulating zero hour contracts, rather than abolishing them as the Labour leader apparently intends. From reading this pamphlet, this title must be interpreted not as equivocation on dealing with the horrors of these contracts, but the conclusion of expert assessment who see ZHC as being highly entrenched in business practice and their reinforced by a web regulatory factors; or, in short, abolishing them is not simple. Maybe this pamphlet acts as a psychic wink to Ed Miliband that abolishing ZHCs is perhaps too ambitious, or at least that he better add some detail to a policy of abolishing them sharpish.
The detail in this pamphlet – on ZHCs and the social security system, and labour law, and public procurement – is important and must be grasped by Labour’s front bench and, quite frankly, anyone wishing to talk about it in the Westminster pubs. Two of these ‘details’ are picked up on here. Firstly, public procurement law, ever a sexy subject, raises several important points. Much like demands to have the living wage forced into public contracts, firms’ use of outsourcing to externalise labour costs has become wide spread. Forcing firms to employ the living wage, in public sector contracts at least, would serve to undermine firms’ incentives to use outsourcing for to push down wage costs. This would be a good thing; the same goes for keeping ZHCs out of public contracts. This is a good test of Ed Miliband and Ed Balls mettle to see if they will put their money where their mouth is. Ed Balls’ own reticence on the role the living wage can play in improving work in public sector pay deals, based on his long held dislike of the living wage, is not encouraging for policy commitments to abolish ZHC in public contracts. If Labour cannot even commit to this, it does make any commitment on ZHC look rather hollow.
The social security implications are crucial too. As Adams and Deakin outline, those on ZHC are usually on very low and variable pay. This means that contribution records may be too low for a worker who losses their job to claim jobseekers allowance. Similar problems arise for statutory redundancy pay statutory maternity pay: most of these workers earn so little that they will skirt beneath these. The system comprised – combined of the social security system, labour law and business practices – is creating a massive pool of poorly paid workers who are being cut out of a civilised society of which they deserve to be part.
From Labour’s apparent ZHC policy commitment, a more blunt and overarching ban on using labour law reform ZHC is implied. There are risks to this if lots of loose ends, like those with public contracts and social security above, aren’t tied up. One, those companies that don’t use ZHC ‘unnecessarily’, as it were, most might simply revert to bogus self-employment practices instead (also very common in the UK labour market). Labour clearly have to answer a lot of very serious questions. The intent might be good, but to pursue real labour market reform they perhaps have to acknowledge their own role in forging and enforcing the Thatcherite-Blairite labour market settlement. A repudiation and detailed commitments are not just welcome, but necessary.
Simon Deakin is one of a number of very important labour lawyers, such as John Hendy QC and Keith Ewing, who could be very important in making the case for #REALlabourmarketreform. His position as an academic contributor is an interesting one given the extent, as he and Adams acknowledge, that ZHCs are used in the University sector. Most people associate ZHCs with sectors like retail where a whole raft of poor working conditions like low pay, low skill, low job security are rife. ZHC use in higher education however isn’t simply to employ workers like cleaners like you might assume. They are also being used to employ academic staff ITAL, usually postgraduate researchers doing research degrees, to teach undergraduates now paying £9000 a year. This is a first class example as to where ZHCs are not necessary. A series of fixed term contracts can be used instead to hire such teaching staff. These (usually) PhD researchers, who are essentially trainee academics, need the teaching experience in order to get work when they finish their PhDs; universities know they can’t attract as many PhDs to their institution without providing the opportunity to get this. Universities also need reams of teaching hours covered that permanent staff can’t. Yet, These highly exploitative contracts are used by universities so that mountains of unpaid work (in the form of preparation time and marking) can be loaded onto the shoulders of ‘teaching assistants’ with the option of sacking them if they need to. This point is made to underline the point above that the use of ZHC is extensive and appear even outside those areas of the economy where we typically expect.
This pamphlet should be read by everyone who attempts to talk about this thorny issue and especially Labour’s front bench.

 

Chartist is advancing a case for #REALlabourmarketreform given life through our poll. This pamphlet is available for £10 to trade union members.

 

@IERUK

#REALlabourmarketreform

 

links:
CIPD, ZHCs – Myth and Reality
Children’s minister voices opposition to ‘London living wage’
Reconstruction after the Crisis: A Manifesto for Collective Bargaining – John Hendy QC and Keith Ewing. Class and IER
Chartist review of A Manifesto for Collective Bargaining
P. Kenyon: How to avoid a Balls up
P. Kenyon: Follow the Leader, in Chartist 271
A. Morton: The Problematic Economics of Balls

 

ZHC