Whole economy would benefit from banning one-sided zero-hours contracts

A few weeks ago, many of us were startled to read that some Luas tram workers were reportedly demanding a pay increase of between 8% and 53%, writes Paul Mills

Worse still, they were threatening a rolling set of strikes to inconvenience the general public when it hurt most.

But it’s not as simple as the headlines imply.

For instance, while Luas employees’ salaries are close to those of Dublin Bus drivers, they are out of kilter with those of DART and Irish Rail.

So, whilst Luas workers can earn up to €42,000 per annum, Irish Rail drivers can earn up to €60,000.

You might say that they have a case.

However, the Luas operating company, Transdev, has announced that it will make a loss this year, possibly more so after any strike.

A resolution of the dispute begs the question as to who will pay for any settlement.

So, what is it that’s getting the unions annoyed, as they start to look for a payback after all of the years of austerity?

Politicians have much to answer for.

They want the electorate to see how well they have managed the economy.

But government — as an employer of public sector workers — needs to manage expectations, or else the country will be right back in the hole from which it has just emerged.

The State is still in deep debt and is not in a position to increase costs.

Politicians have implied that they would reverse at least some of the cuts that were imposed on the public sector during the financial crisis.

This has heightened expectations among the Government’s own employees.

Unfortunately, there are many more waiting, in the public-sector wings, for a payback.

The one thing such folk have in common is that they have steady jobs and ones that pay enough to live.

There is another group of people who also suffered during austerity.

The concept of zero-hours contracts, or similar, low-pay and low-security contracts, has been allowed to grow over the last decade, partly because of the shortage of full-time jobs.

Companies have needed to keep costs down, while employees have been desperate to earn any honest money.

It was reported last week that 100,000 people are tied into such contracts, which is one in 20 workers. Such low-security contracts are one-sided.

The employee has to be permanently available and has no idea how many hours, if any, he or she will work in the coming weeks.

The person has no way of planning his or her life, given the total absence of any knowledge of projected income.

We can only imagine what it must be like to run your life with such uncertainty.

Raising a family, buying a home, or even getting a bank loan are impossible. Paying the minimum wage exacerbates the problem even further.

A few years ago, there may have been some contrived rationale for such contracts, but with 8% growth in the economy and a sizeable drop in unemployment, there surely cannot be an imperative any longer.

Government was meant to bring in legislation to limit the abuses prevalent in such contracts.

But it has been slow to do so, given the election, lethargy, and, no doubt, the fear of alienating the support of certain, large business sectors.

New Zealand has taken the brave step, as they have in many other things, to ban zero-hour contracts.

Indeed, it has dramatically increased the fines for those who are found guilty of exploiting workers in general.

It has been suggested that we should tighten up the rules, instead of outlawing the practice.

It has been argued that zero-hours contracts suit a lot of people who need money, and that any ban would only penalise them.

A total ban would make more sense.

It might make more sense for companies to drop the contracts.

Indeed, the whole economy would be better-served.

Perhaps unions, such as Siptu, would be better employed trying to eliminate so-called zero-hours contracts than trying to squeeze more from an economy that is still trying to get up off its knees.