Stop trying to ban zero hour contracts, it helps both young people and businesses
Labour’s promise to ban zero hour contracts will harm a good chunk of people they’re hoping to get them to vote for them, even if it does appease the unions, writes Ben Cope.
Speaking at the Trade Union Congress gathering last week, Labour’s Angela Rayner promised to enact an employment rights bill within 100 days of entering office. This “New Deal For Working People” would include well overdue policies such as boosting statutory sick pay and forcing companies like Amazon to recognise unions in the workplace.
But alongside this, Rayner also committed a Labour government to banning zero-hour contracts. The controversial working arrangement provides flexibility to both companies and workers. Rather than introducing a blanket ban, Rayner should recognise the complexity of labour markets by offering workers greater protection where needed.
Zero-hour contracts aren’t the bogeyman of employment law they’re made out to be. Many – me included – have benefitted from them. When I was a student, I appreciated the flexibility they offered. It meant I could work in bars and restaurants during long university holidays whenever I wanted, allowing me to go on holiday or travel round the country seeing new friends as I wished. A more formal contract would have locked me down.
Many share my experience. Uptake of zero-hour contracts skew significantly by age. ONS figures show that among 16-24 year olds – many of whom juggle work with studies – 13.0 per cent of those in employment make use of them, whereas for breadwinning 35-49 year olds it is a mere 1.8 per cent. Uptake rises again among over 65s looking for a source of flexible income to top up their pension. Most aren’t relying on zero-hour contracts to make ends meet. Only a quarter of people on zero-hour contracts are in full time employment (a figure which has fallen in recent years), and less than 15 per cent work more than 10 hours per week. Labour should recognise that many workers choose zero-hour contracts because it suits them. Why else would over 60 per cent say they benefit from the arrangement?
Labour is at risk of getting bogged down in old debates. When zero-hour contracts rose in prominence during the Coalition era, the government launched a consultation which would eventually ban “exclusivity clauses” through the Small Business, Enterprise and Employment Act 2015, when an employer prevents a worker on a zero-hour contract from working elsewhere.
Although there remain concerns about the enforceability of this legislation, then business secretary Vince Cable said: “zero hours contracts have a place in today’s labour market. They offer valuable flexible working opportunities for students, older people and other people looking to top up their income and find work that suits their personal circumstances.”
Jeremy Corbyn ignored this when he floated the prospect of banning zero-hour contracts in 2016, warning of a dystopian mass gig economy of poverty and insecurity. This hasn’t materialised. Keir Starmer has done well to distance himself from his predecessor. He should do so again.
Rather than removing flexibility, a prospective Labour government should commit to crack down on bad practices and give workers greater protection. Workers should be aware of the notice they will be given for new shifts to avoid always feeling “on call”, and companies should provide a guide for the number of hours that will likely be made available to increase transparency. More radically, companies could be forced to justify why they offer zero-hours contracts, paving the way for legal challenges for jobs that are effectively full time.
With Labour increasingly looking like a government in waiting, they should start to act like a party for everyone, not just their old union friends. Banning zero-hour contracts would make it more difficult for people to set up their lives how they want. It would be a step towards zero choice.