Zero-hours contracts are on road to nowhere

Difficult problems in difficult times often call for difficult solutions.

Many companies are going through hard and inconsistent trading. Many are hanging on by their fingernails and hoping that there is light at the end of the tunnel. Keeping all of your employees on a full-time, permanent basis when your trading patterns are inconsistent, at best, can be a license to go broke very quickly.

In such circumstances companies can and do introduce flexible employment hours and contracts in an effort to meet trading patterns and sales without going to the wall.

The ‘zero hours contract’ is one such contract that we have heard a lot about over the last few months. Unfortunately, it would appear that the way these contracts are being used in some sectors and by a number of major service sector employers is over the top.

The ‘employee’ is effectively reduced to a commodity like a tin of beans on a shelf waiting until someone comes to pick him or her up. It is not sustainable and is effectively immoral.

This type of contract means that the employee has no guaranteed hours or roster but must be available for work.

Whilst the system is undoubtedly beneficial to the employer, it puts the ‘employee’ at a serious disadvantage. It means there is no sick pay, only limited holiday pay, and getting a loan or a mortgage is impossible. In fact there is no guarantee of any work, so no guarantee of any pay and all that leads from that.

It takes us back to the days when fruit pickers, dock workers, farm labourers and general workers stood at a designated corner and waited for an employer to come by in the hope of being selected to work that day.

In recent months we have seen several reports about the use of such contracts. Earlier this month, UK company Sports Direct was being lauded when it announced that its employees were to share a £135m (€158m) bonus pot.

However, it quickly became clear that the announcement was selective at best, as 90% of the staff — that is 20,000 part timers on zero hours contracts — are ineligible for the bonus.

It was also reported that McDonalds has up to 83,000 employees, or 90% of its workforce in the UK, on similar contracts. Only last week it was reported in the Irish Examiner that Domino’s Pizza operates similarly in Ireland to its own UK chain with the majority of non-managerial/supervisory staff on zero hours contracts.

Fortunately Irish law does provide some protection to the worker where legislation requires that the employee be compensated if he or she does not work at least 15 hours. This does act as a deterrent.

However, it’s not only low-paid workers who are subjected to zero hours contracts. In the UK, there are reportedly examples of doctors and college lecturers, and even reporters on zero hours. Last week, it was claimed that very many of Ryanair’s pilots are on zero hours contracts.

Clearly there are times that a company needs flexibility and having part-time workers or workers on call can be and is of benefit. In fact, there are people who prefer this type of employment as it gives them flexibility.

However, most folk do require some certainty of where the next week’s bills are going to be paid from.

In operating these contracts to the extent that they are being operated is grossly over the top. Most companies’ business patterns do not change so frequently that 90% of staff should be on zero hours contracts.

Exploiting current economic circumstances and treating people like a commodity will ensure that the law of unintended consequences will kick in, and unions will be marshalled to act on these people’s behalf. Is that what these companies want?

business@examiner.ie

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