Zero-Hour Contracts: Time for Businesses to Review Their Use?

Last week saw the launch of ‘Zero Hours Justice’, a campaign that aims to ban the use of zero-hour contracts. It is being bankrolled by Julian Richer, of Richer Sounds, and was announced all over the national press.  The momentum against these type of contracts is continuing to grow; speeding up even.

This got me thinking about my clients that use zero-hour contracts.

It’s a complicated issue. Zero-hour contracts have always been controversial and are clearly open to abuse. However, in my experience, I’ve seen them used by business who can’t predict their workload and need flexibility with their workforce in order to survive. It’s difficult to get contracts in place to address their situation so zero-hour contracts were a simple and effective solution, rolled out with the best intentions.

Time to ditch zero-hour contracts?

I now think that the tide has well and truly turned, and for many businesses, they are no longer the best option. My advice to clients now is: avoid them if you can.

They are potentially a serious risk to businesses, both in terms of damage to reputation (a risk that is heightened by social media) and negative impact on the workforce (morale, health, productivity). Media and political scrutiny will, in my view, increase as time goes on and I can see them eventually being much more restricted, or even banned, as Ireland has recently done. Businesses want to be ahead of the curve.  

‘Better alternatives available’

Some businesses will take the view that on balance they are still the best solution for them. However, for many organisations there are better alternatives contracts available, such as casual working, part-time working, fixed-term contracts or self-employed consultants to name a few.

If done properly, these alternative contracts will not only enable a business to continue to operate its workforce as it does, but, because they will accurately reflect the reality of the working relationship, they can have a hugely positive impact on improving your workforce’s performance, productivity, engagement and wellbeing. They also reduce risk, because the status (i.e. employee/worker/self-employed) of the individual can be defined and controlled.

Therefore, my advice to businesses that use zero-hours contracts is to review your contracts and your working practices, to see if there is another way of doing things. If, for example, you use zero-hours contracts but your staff have regular working patterns, then you have other (potentially better) options available. 

This exercise can be really tricky and time-consuming, but actually, if you break it down and get support, it is very achievable. I would suggest that it is something that businesses need to address sooner rather than later.