Zero hours contracts are coming under increasing scrutiny as more employers begin to use them. Paul Robinson reports.
NORMAN Pickavance became a familiar figure in the business world during his time as head of human resources at Yorkshire supermarket giant Morrisons.
Less happily, he also had a spell as chairman of Create, the Leeds-based restaurant and social enterprise that collapsed earlier this year.
Now, however, Mr Pickavance has a new challenge on his hands.
He has been chosen by Ed Miliband to chair an independent consultation into one of the country’s hottest current areas of political debate - zero hours contracts.
Mr Pickavance will be holding talks with business groups about the Labour leader’s plans for ending the “exploitative” use of the contracts.
The three key measures put forward by Mr Miliband at last week’s TUC conference in Bournemouth were:
Banning employers from insisting zero hours workers be available even when there is no guarantee of any work;
Stopping zero hours contracts that require people to work exclusively for one business;
Ending the use of zero hours contracts in cases where employees are working regular hours over a sustained period.
Unsurprisingly, some might say, one Labour MP in Leeds believes the action being proposed by Mr Miliband is long overdue.
Rachel Reeves (Leeds West) told the Yorkshire Evening Post: “For many people, zero hour contracts are the cause of extreme anxiety.
“No guaranteed income means uncertainty over paying bills and rent and can leave workers unable to plan for the future through pensions and savings.
“For some workers, like students, extreme flexibility can be beneficial. It allows them to fit the odd piece of work in around their studies. But it can’t be right that there may be as many as 5.5 million people working in such an arrangement. “That’s why Ed Miliband has set out plans to clamp down on this problem.
“Of course workers and businesses need flexibility, but this should not be an excuse for exploitation.
“It’s unfair for some employers to expect workers to wait by the phone all day for them but not earn a penny or have the opportunity to chase other opportunities.”
The 5.5 million figure quoted by Ms Reeves was the stand-out finding from research conducted on behalf of the Unite union last month.
It also found that people aged under 30 are the most likely to be on zero hours contracts.
The average wage of a person tied to one of the deals was £500 per month.
Karen Reay, Unite’s regional secretary for Yorkshire, Humberside and the North East, told the YEP: “The Government’s refusal to address the growing scandal of zero hours contracts is creating a growing sub-class of insecure and low-paid employment.
“It is denying workers access to mortgages, renting a home and even getting a mobile phone.”
That is, clearly, only one side of the argument.
Some employers like the contracts because they allow them to take on staff in response to the kind of shifting demand for services that can be found in tourism, hospitality and other sectors.
The freedom offered by the deals is also said to be envied by firms in hard-up countries such as Spain and Greece, where tighter restrictions can put bosses off hiring people.
One company that reputedly has a soft spot for zero hours arrangements is retail giant Sports Direct.
Reports over the summer suggested that 90 per cent of the company’s workforce - around 20,000 part-time staff - were on the contracts.
That claim saw the Leeds branch of the chain targeted in a rally staged by the Youth Fight For Jobs group.
Yet Sports Direct is far from the only organisation to have gone down the zero hours route.
It is estimated that more than 300,000 adult social workers in England are on the contracts.
One report has claimed there are almost 100,000 zero hour deals in use in NHS hospitals.
However, and perhaps luckily for Norman Pickavance, his former employers at Morrisons are not among the firms which utilise the system.
Speaking about the benefits that the contracts can bring, Neil Carberry, director for employment and skills policy at the Confederation of British Industry, said: “Flexibility in the workplace, such as zero hours and agency working, creates opportunities for those who find it hardest to break into the jobs market, including young people and parents.
“Some workers prefer the flexibility, while others use it as a stepping stone to permanent work.”
The Government’s line on the issue is a little less clear-cut.
It says it does not want to restrict people’s ability to choose the hours they work and points to the flexibility - that word again - which can go hand-in-hand with zero hours life.
At the same time, though, concerns exist about possible abuses of the system and a review is now under way into how contracts are being pressed into service in modern-day Britain.
Announcing the review early last month, Business Secretary Vince Cable said: “Since 2005 there has been a rise in the use of zero hours contracts.
“For some these can be the right sort of employment contract, giving workers a choice of working patterns.
“However for a contract that is now more widely used, we know relatively little about its effect on employers and employees.
“There has been anecdotal evidence of abuse by certain employers - including in the public sector - of some vulnerable workers at the margins of the labour market.
“Whilst it’s important our workforce remains flexible, it is equally important that it is treated fairly.
“This is why I asked my officials to undertake some urgent work to better understand how this type of contract is working in practice today with a view to taking action if widespread abuse is identified.”
Alec Shelbrooke, Conservative MP for Elmet & Rothwell, agrees that the UK labour market benefits from a flexible workforce - but also says it is vital that “robust employment protections” are in place to safeguard the rights of staff.
He told the YEP: “I wholeheartedly support the Government’s decision to investigate how zero hours contracts are used by talking to employees on these contracts and the businesses that use them.
“As a Conservative trade unionist, I see fairness in the workplace as a vital aspect of employment policies but I also agree with Labour’s Shadow Business Secretary, Chuka Umunna, that some people choose to work on zero hour contracts as they offer a greater degree of flexibility.”
Mr Shelbrooke’s fellow Tory MP, Stuart Andrew (Pudsey, Horsforth & Aireborough), said: “Zero hours contracts can work for some, however it is of paramount importance to ensure people are not exploited by them and I welcome the Government consultation.”
Away from politics, Leeds Metropolitan University business school lecturer Dr Brian Jones says the idea that the contracts can help people into work does contain an “element of truth”.
“They have some positives that include allowing managers the flexibility they need to cope with peaks and troughs in workload,” he told the YEP.
“They can give employees the flexibility they need to manage the demands of work and home life.
“[But] critics maintain that people working zero hour contracts too often lead an uncertain and insecure existence. Such people do not necessarily know what, if any, hours of work they will have in any particular week.
“This can undoubtedly create difficulties for family life and the planning of child care and other care responsibilities.
“These contracts can negatively impact on leisure time and family life. The path to full-time hours is not guaranteed and is not always smooth.
“In whose interest do zero hour contracts work? Who loses and who benefits from their use? Evidence needs to be gathered to make the case for change and policy needs to play catch-up and changes made to minimise opportunities for the worst cases of zero hour exploitation.”
The game of catch-up has, in some respects, already begun, with the launch of Vince Cable’s review and Ed Miliband’s consultation.
Mr Cable was first out of the blocks and is due to be given the findings of his officials later this month. Supporters and opponents alike will be waiting and watching for his response to them.
Recent research carried out by the Chartered Institute of Personnel and Development found: Nearly a fifth of all employers had at least one staff member on a zero hours contract. Employers in the voluntary and public sectors were more likely to use zero hours contracts than those in the private sector. Industries where the contracts are most widely used include healthcare and education as well as hotels, catering and leisure. A person on a zero hours contract will on average work 19.5 hours per week. Fourteen per cent of the zero hours staff surveyed said their shifts “often or very often” failed to provide them with sufficient income for a basic standard of living.