Not everyone is happy with the government’s proposed legislation on zero hours contracts. The TUC said it doesn’t go far enough, UNISON called for much tougher measures and John Philpott dismissed it as kitten toothed.
Of the recommendations in Norman Pickavance’s report, published in May, the only one the government plans to bring into law is the ban on exclusivity clauses. These are clauses which prevent employees from working for another firm, even though the employer does not guarantee to provide them with work. Workers therefore can’t even cover their risk of low hours by taking on a series of contracts with different employers.
This is the most obviously unfair abuse of zero hours contracts. There will be little opposition to outlawing it. That said, even in the harsh world of zero hours employment, such clauses only affect a minority of workers. According to the CIPD, around 10 percent are prevented from working for other employers with a further 15 percent facings some restrictions, though the data is somewhat hazy. (See Page 23 here.)
Furthermore, not everyone is convinced that the ban is workable. Here’s employment lawyer Elizabeth George:
Banning exclusivity clauses will result in precisely NO benefit at all to the overwhelming majority of zero-hours workers.
Yes it is ludicrous for an employer to think it can demand exclusivity from someone when it is offering no guaranteed work in return, but exclusivity clauses (which are not particularly widespread amongst the million plus zero hours contracts out there) are not the real issue here.
The crux of the matter is why are employers choosing to use contracts that provide their staff with no security and the bare minimum of employment rights in situations when work is clearly available and demand not the least bit unpredictable? The answer is – because they can.
And this means that, even if there is no longer an exclusivity clause, employees who works for someone else can simply have their hours stopped. There is no guarantee of work so, if you piss off your employer, you don’t get any more.
What this means (I suppose) is that an employer will not be able to sue a zero-hours worker who has – out of some selfish determination to earn a living – gone off and done some work for somebody else. I’m sure I won’t be the first to point out that they won’t need to. The clause might be legally unenforceable, but that will hardly matter if a worker can be denied any further work as a result of breaching it and there is nothing in the Bill, so far, which creates a right for a worker not to suffer a detriment for breaching an exclusivity clause.
In reality this provision will be inserted into employment law with little practical effect. It will gather some headlines but do next to nothing to improve the lives of those who are trapped in precarious and low-paid employment.
The trouble is, these objections apply to many of the other recommendations in the Pickavance Report too.
1. Ensure that workers on zero-hours contracts are not obliged to be available over and above their contracted hours
Fine, you’re not obliged to be available but if we call and you’re not free, it’s the last call you’ll get.
4. Give zero-hours workers a right to compensation when shifts are cancelled at short notice
Sorry, your shift has been cancelled. What? You’re taking us to a tribunal for compensation? OK, here’s an hour’s pay. Yeah, I know you’re entitled to 2 hours but is it really worth going to court for the extra? Oh, and don’t expect a call next week.
The only recommendation with any force is Number 3, which recommends that zero hours contracts automatically become permanent after 12 months. (Also recommended in the Resolution Foundation’s report.) Even this doesn’t help those in their first year, though, and might well lead to contract termination after 11 months becoming the norm.
That phrase “because they can” is important. It sums up the imbalance of power in the relationship. Zero hours contracts grew out of a weak labour market where employers hold the power over those desperate for work. The contracts themselves are one-sided because the employer has a pool of labour. People need the hours more than the employer needs any one individual. Because the contracts don’t guarantee work, the employer doesn’t even need to discipline or sack a worker, he can just stop calling them.
As I said last time I looked at zero hours contracts, they reflect an economic power imbalance and, short of banning them completely, I’m not sure how far the law can go to mitigate the effects of their abuse. Banning them seems draconian when, by a number of measures, most people on them are satisfied with the arrangement. According to the CIPD, only 27 percent are dissatisfied and a UKCES study found that only a third were on zero hours contracts because they could not find a job with regular hours. (As an aside, these figures are broadly similar to the numbers of people who say they are dissatisfied with self-employment.)
Even if zero hours contracts were banned, the casual labour market might simply shift to other forms; yet more self-employment, for example. To stop employers abusing their workers requires some form of Big Power pushing in the opposite direction. That used to be what the trade unions did. We now assume the state will take that role but, without the sort of far-reaching powers that few politicians would be prepared to grant, legislation is unlikely to achieve much.
The government’s ban on exclusivity clauses might scare a few employers away from some of the worst abuses but the exploitation associated with zero hours contracts will continue. Employment relations are determined, largely, by social and economic factors with the law simply providing the scaffolding. Set against low growth, low investment, low pay and underemployment, there is only so much the law can do.