Zero hours: act with caution

Heavy regulation over the work contracts would be fraught with danger

Image of Brian Groom

The clamour for action in the UK to curb zero-hours contracts, under which employees have to work as and when required, is growing louder. There is certainly a case for curbing abuses. It will be far from easy, though, to find a way to do that without damaging job creation.

Research by the Chartered Institute of Personnel and Development suggests about 1m people, or 3-4 per cent of the workforce, are on such contracts, under which they have no guaranteed hours and are paid only for hours they work. They are most common in the voluntary and public sectors, though industries that use them include hotels, catering and leisure, education and healthcare.

For some workers, such as students, older workers topping up pensions and others fitting work around their home lives, these contracts can be beneficial. In the CIPD survey, just 16 per cent of those affected said their employer often failed to provide them with sufficient hours each week.

But 14 per cent said they could not earn a basic standard of living. These contracts can be harsh on those who depend on regular income and see it vary wildly. Some managers also use allocation of shifts as a reward and punishment mechanism.

Vince Cable, the business secretary, has ordered a review by civil servants, which could lead to a wider inquiry. He does not want to ban them altogether, but is taking legal advice on zero-hours contracts that tie workers to one employer.

Unions and Andy Burnham, the shadow health secretary, have urged a ban. A blanket ban, though, could hit jobs by making many activities uneconomic. A business seeing an upturn in demand, but unsure how solid it is, might put off expanding if it meant employing more people on fixed hours.

And how would a ban work – would employers only be able to offer fixed hours, and if so how many? A rigid system would deny them flexibility to meet peaks and troughs of demand. A minimum number of hours would have similar problems. Would it be one, five, 10, 20 or some other figure? If your problem is you cannot pay rent because your hours fluctuate between, say, 10 and 40, then a minimum of 10 would not help.

The issue is linked to Britain’s so-called “productivity puzzle”, whereby employment has remained high relative to output, largely by squeezing real wages. But despite the growth of these contracts, average hours worked have remained steady.

A recovery may eventually ease the problem but cannot be guaranteed to solve it. Voluntary guidance on good and bad practice would probably be ineffective in tackling abuses. We need a thorough debate, however, before embarking on heavy regulation.

‘Walkable’ London

I am off to walk Hadrian’s Wall this week – the latest hill walkers’ motorway – but perhaps I should be doing it in London instead. The number of trips made daily on foot in the capital increased 12 per cent between 2001 and 2011, according to The Economist. Almost a third of those sampled made a continuous walk of 30 minutes once a week to get from place to place, rather than for exercise.

But London is bucking the national trend, which has seen a 27 per cent decline in walking since 1995, partly caused by fewer children walking to school. While rural rambles are still popular, fewer people are walking to their weekly grocery shop.

Some of this is down to London’s rising population, but mayor Boris Johnson has followed Ken Livingstone in measures to make London a “walkable city”, such as maps that encourage people not to take the Tube for one-stop journeys. Streets have also become more pedestrian-friendly.

Perhaps this is one issue in which the rest of the country could follow the capital’s lead. Pedestrians also spend more than drivers, so it could even help to ease the pressure on the ailing high street.

What’s in a name?

EADS, the defence and aerospace group, is renaming itself Airbus, a blow for proper names against the rising tide of initials. Watch your step, accountants “EY”.

The next target will be to make proper names sensible, unlike Everything Everywhere, which despite its boastful moniker is just a mobile phone operator.

brian.groom@ft.com


Letter in response to this column:

Today’s labour market requires fluidity on both sides / From Ms Ann Bevitt

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