Why we need to ban Zero Hours Contracts


  By Ritchie Venton
Zero hours contracts perfectly encapsulate the exploitative system we live under.  They are the ultimate in casualised labour, the pinnacle of job insecurity, the worst extreme of the ‘race to the bottom’ on workers’ rights. 
All in the name of profit and far from being on the margins of the labour market, zero hours contracts are mushrooming, encouraged by employers’ organisations and the mainstream pro-capitalist political parties.

A survey by the Chartered Institute of Personnel and Development (CIPD) has estimated the number of people employed on these contracts at over a million – and growing at an ever increasing rate.  Zero hours contracts (ZHCs) give all the flexibility to the employers and all the risk and insecurity to the workers. 

Under them workers are contracted to work for a particular employer, with no guarantee of how many hours work they get, if any, and an insistence that the worker is on call, unpaid, ready to work whenever asked to.

Supporters of ZHCs claim they suit people who want flexibility of the hours they work but that argument is seen by many as a cover-up for a system of ruthless exploitation.  The reality of life employed on one of these contracts can be seen in the wording of this extract.

“The company has no duty to provide you with work. Your hours of work are not predetermined and will be notified to you on a weekly basis as soon as is practicable by your store manager. The company has the right to require you to work varied and extended hours from time to time.”

Some companies also make it a precondition of being hired that workers waive their rights (under European Working Time Regulations) to have the working week limited to 48 hours.  In other words, you could be asked to work over 48 hours one week, but no hours the next, and all along you are contracted to that company, unable to get work with another firm, and only paid for the actual hours worked.  And it’s all perfectly within the law! 

The potential for exploitation is clear with the possibility that employers could use Zero Hours Contracts as a weapon to reward, reprimand or punish people according to their whim.  Zero Hours Contracts also involve zero guarantee of sick pay, holiday pay, or redundancy pay.

Planning life on one of these contracts is virtually impossible as one Edinburgh care worker explained:

“You basically have to take what hours you’re given.  So on any typical week I might have a Friday off when I’d rather be working, but then have to make up my hours on a Sunday when I want to spend time with the kids.”

Budgeting for daily life is difficult and because there is no fixed, regular weekly wage involved, it is almost impossible to negotiate benefits such as Working Tax Credits and Childcare Allowances.  The one million-plus workers subjected to this form of excruciating insecurity are also concentrated in the lowest-paid sectors of employment.

The Tory-Lib Dem Coalition might try to claim it just blesses workers with infinite flexibility without reducing incomes but according to the recent Resolution Foundation Report, the average weekly pay of those on ZHCs is £236, compared to £482 a week for workers on other contracts.  They also work an average of 21 hours a week – compared to 32 hours for the rest.

These contracts are not confined to the fringe of the British economy – nor are they the preserve of unscrupulous backstreet employers struggling to survive and cutting labour costs.  Quite the opposite in fact.  The government’s own Workplace Employment Relations Survey of late 2011 found that 6 per cent of workplaces with less than 50 workers used them, whereas twice that proportion (11 per cent) of workplaces with 50-99 workers did so and a whopping 23 per cent of workplaces employing 100 workers or more used zero hours contracts.

The greatest concentration of these contracts are in the hotel trade, catering and leisure, education, and healthcare.  These forms of employment are not new but are growing with relentless speed.  The media has only now caught up with their existence, but ZHCs have been increasingly common since the late 1980s, and are part of a much broader, deeper trend towards casualised, insecure work since the mid 1970s.  What is new is the sheer scale of their use.

For about 30 years after World War Two, governments – both Labour and Tory – tended to aim for full employment, reluctantly tolerated the strength of the trade unions, and generally thought rising wages and secure employment was good for capitalism.  It provided a growing market for their goods amongst millions of workers on better wages than their parents or grandparents had earned.

That changed with the first signs of crisis in the profit-based system in the mid-1970s, when UK governments began to claw back the gains working people had won in previous generations in order to boost flagging rates of profit.

Thatcher’s government in particular unleashed a war against workers’ conditions, seeking to smash the ability of trade unions to resist, deploying the weapon of mass unemployment to drive down wages.  In subsequent years, both Tory and Labour governments ripped manufacturing apart and concentrated far more on financial capitalism’s interests and low paid service sector employment.

Alongside deregulation of work and globalisation of capitalism, this swung the balance of power decisively to the employers, unleashing a reign of terror in workplaces, which accelerated in the wake of the miners’ defeat in 1985.  New Labour governments carried on where the Tories left off in fashioning the conditions for maximum profit at the expense of workers’ wages and conditions.

Privatisation was a major driver.  In their quest to secure local authority contracts for the likes of home care, companies use ZHCs to ensure their bid is as low as possible.  Privatisation invariably means cuts to workers’ terms and conditions, and in recent years has helped create the longest fall in real wages since the 1870s. 

The TUC reckon four out of every five new jobs created since the 2008 banking crisis have been in low wage sectors.  Since the Westminster Coalition took office in 2010, half a million public sector jobs have disappeared. 

Most of the jobs created since 2008 are either agency work, part-time, ZHCs, or temporary.  In Scotland, just short of one in ten workers (9.8 per cent) are underemployed.  Research shows this is double the rate prior to the 2008 bankers’ crisis, and that the workers starved of hours and wages want additional hours that are the equivalent of 50,000 full time jobs.

This desperate need for more work amongst the precariously employed is the result of the relentless decline in wages, which have fallen for 41 consecutive months, clashing with rising prices.

That is the real context of the galloping growth of ZHCs.  They are not a lifestyle choice for workers who prefer ‘flexibility’. They are one major strand to the package of casualised, insecure, low paid work that is imposed on desperate people, in pursuit of short-term profit boosts to the employers.

Bosses’ organisations boast it is better to have 20 hours one week and none the next than to be unemployed.  They all oppose tighter regulation of ZHCs – as threatened by Coalition Lib Dem Minister Vince Cable who, incidentally, shares their opposition to an outright ban on these malicious practices.

Every minor or major improvement in working class conditions, at work or in communities, had to be fought for in the face of opposition from capitalists.  We can’t rely on Vince Cable, let alone the Westminster government, to outlaw exploitation.

The trade union movement should launch a massive recruitment drive amongst unorganised workers, demanding the outright banning of all ZHCs, fighting instead for a decent Living Wage as the guaranteed minimum hourly rate for all over 16.  They should demand secure and permanent jobs for all – including full time jobs for all who want them.

By fighting to boost the hourly rates of pay, the working week could also be drastically reduced to a maximum of 35 hours across the board, without loss of earnings, ending the crazy contradictions of millions stressed out by working the longest hours in Europe whilst millions of others suffer the poverty and insecurity of no or casualised work.

There is vast potential for employment – in building decent affordable homes,  hospitals,  state-of-the-art local schools; in green energy and an integrated public transport network.  Instead of foisting insecure work on workers, we need to build a crusade for dignity at work, decent and secure jobs, democratic rights, and a vast, radical shift in power and wealth from the capitalist profit-junkies to workers’ wages and public services.

Today’s Westminster parties will not deliver such a vision.  All the more reason to link the struggle against modern serfdom in all its forms – including ZHCs – to the call for an independent Scotland where we can build a socialist future that is founded on people, not profit.

This is an abridged version of an article by Mr Ritchie Venton, the full article can be read HERE.