Zero Hour Contracts and how they should change

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Zero Hours Contracts - Love them or Hate them?

In my blog this week I am going to briefly touch on Zero Hour Contracts! Yes, I know quite controversial and love them or hate them, at the moment they are here to stay!

“Hang on!” I hear you say “they may not be here to stay”. You may be right and I suppose after the May General Election they may disappear and annoyingly I should then probably delete this blog.

So here we go! In my opinion they aren’t all bad!

Yes, I accept that they are currently open to abuse. As with almost everything in life, a small minority will always try and abuse a well meaning system, process or situation and ruin it for others. It’s simple, employers shouldn’t be abusing them. In my mind a contract of employment clearly sets out or should clearly set out what both sides can expect from an employment. In terms of work schedule the very least the contract should state is that you will be required to work a minimum of X hours at a rate of Y and as an employer we will give you Z hours or days notice that you will be required to work.

According to the ACAS website :-

The term 'zero hours' is not defined in legislation, but is generally understood to be a employment contract between an employer and a worker, which means the employer is not obliged to provide the worker with any minimum working hours, and the worker is not obliged to accept any of the hours offered.

The way the law currently is means that there is NO obligation on the employer to offer hours or days of work to an employee who has signed one of these contracts.

It is the OBLIGATION part I am not sure about. There should be defined parameters for any sort of contract employment or not.

So as I stated above the member of staff should have a defined minimum number of hours to allow them to budget, plan the rest of their month’s time and spending. However, most of these types of contract will mean the employee has the same employment rights as normal staff with some slight differences about breaks or time off.

An person employed under one of these contracts will also be entitled to annual leave and their pay will be subject to the National Minimum Wage.

As you can see form this BBC article the Government is clamping down on companies paying under the minimum wage through the abuse or zero hours contracts or other style contracts.

On one of the Governments own website it states that a

Zero Hours Contract sets forth the duties, expectations, and benefits that make up an employment relationship when the employee has no set amount of working. The agreement allows you to customise all of the necessary terms, including the payment structure, vacation and benefits, length of employment, ownership of intellectual property, confidentiality and more.

You can see this definition and more detail from the HERE

Make them better and call them Flexible Hours Contracts

Given the new flexibility guidelines, see my previous blog the new flexible hours legislation. First of all, they should not be allowed to be for ZERO hours as they should have an agreed or contractual minimum number greater than zero and that provides a living wage. So let’s rename them flexible hours contracts.

I think that these types of contract if properly done and properly managed, by both sides, can offer a level of flexibility to an employee who may need or want it whether that’s because they are:

  • coming back from maternity or paternity leave,
  • returning from long term sickness,
  • managing childcare needs
  • semi-retired or physically unable to work full-time.

I think there should be greater flexibility and recognition on the employers side that people on these contracts may need to work for other organisations as well, paid or not. This means that within the contract there needs to be a new style exclusivity or notification clause allowing a discussion and agreement to take place.

So here are some other ideas for making this style of flexible contracts work better?

  • Transparency – no small print everything is laid out and clearly explained face to face by the employer
  • Clarity – the contract needs to be written in easy to understand non-jargon or laymen style language with explanations where necessary
  • Visibility & the correct attitude - on both sides so it reflects a more two way style contract coupled with a fairness and reluctance by employers to abuse this style of contracts. Maybe there is a corporate statement or paragraph in the employee handbook stating this. It would be good if there should be an equal level of flexibility and fairness on both sides? So again more like a two way contract.

Managing staff and tracking their hours

So if this style of contract works and persists how would you manage your staff more easily or effectively? There will be lots of different shifts or hours across your workforce. You would need to track them, their availability, attendance, hours and come up with gross pay figures quickly and easily.

You would also want to reduce the administrative burden on the company and choose a system, like PARiM, that allowed all staff under these contracts to see and apply for shifts wherever they are whenever they want.

Historically this style of employment works around a notice board, which in practical terms, means that if you are in work doing a shift you get to see it and apply for as many shifts as you want. If not, you have to go out of your way on a day when you’re not working to go in and sign up for shifts! This doesn’t seem/ sound fair.

Another SIGNIFICANT PLUS or advantage of using a system like PARiM would be that it allows your staff to set themselves unavailable within agreed parameters so that the organisation can plan and manage their workforce.

So ideally the system you choose has the flexibility to allow for work/ shifts to be pushed out/ suggested by the employer and pulled down or applied for by the employees.

Conclusion

I think that the zero hours contracts or a flexible hours style of contract is here to stay but that legislation is needed, coupled with stiff penalties to stop employers abusing them. Perhaps, similarly to schools and NHS trusts if a person is caught abusing their employees under these contracts they aren’t a “suitable” person to be a director or owner of a business and some regulatory body parachutes in a new MD or all powerful HR Director? Just an idea!

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