Ian Brinkley: Developing new policy toward future of zero hours contracts
Wednesday 30 July 2014In our blog series on atypical contracts in the changing world of work, Ian Brinkley, Chief Economist at the Work Foundation, talks about the future of zero hours contracts.
Ian Brinkley, Chief Economist, Work Foundation
The Work Foundation is a not-for-profit organisation and independent authority providing advice, consultancy and research on the future of work, improving the quality of working life, leadership, economic and organisational effectiveness. Ian was previously Chief Economist at the TUC.
Looking back over the past 10 to 20 years we can see a number of big changes - or rather a lack of them. Firstly, there has been no significant change in the share of permanent employee jobs between 1993 and 2014. Secondly, we have seen little change in the incidence of some flexible working arrangements between 1997 and 2013. Thirdly, there has been some shift towards flexible working that gives mangers more control over hours worked - zero hours contracts (ZHCs) are part of this change.
However, the debate about ZHCs tells us that some of the conventional definitions of contingency no longer work - most people on ZHCs say they are permanent. We have problems measuring contingent work - which the ONS to its credit has partially addressed - but we still lack good measures of change over time.
So what should we do? I set out below some principles for thinking about how we develop a proportionate, effective, and constructive policy response in the future on ZHCs.
As a starting point, policy should recognise that a workforce with a high share of longer term stable employment relationships between individuals and employers is highly desirable, not least to encourage investment in training and development. But we don't want to stop people choosing more flexible work arrangements or deny employers an option that may help preserve jobs.
As a general principle, the widespread use of involuntary ZHCs should be discouraged unless there is a clear and pressing business reason.
Policy should be clear about which problem it is trying to address. We need to clearly distinguish between problems which are specific to zero hours and much bigger problems such as low pay of which zero hours may be a small part.
Policy should be proportionate and recognise the trade-offs. The question always has to be asked - why legislate on zero hours and not other forms of casual employment? Tougher policies on zero hours may simply move the problem somewhere else while too restrictive a stance may reduce employment opportunities.
Policy should always take account of sectoral differences. The context in which zero hours are deployed varies a great deal from higher education, social care, and retailing and hospitality. Policy should encourage a sectoral stakeholder approach between employers, trade unions, and, where appropriate, public authorities and funding institutions.
My view is that policy should work primarily through "soft" power by promoting a high awareness of existing rights and responsibilities, effective enforcement, speedy and accessible means of redress, and officially backed guidelines on good employment practice. Some employers may be able to reduce use of ZHCs through better demand forecasting techniques.
And by changing organisational behaviours around high profile specific issues such as zero hours, we can generate spill over benefits by addressing the wider weakness in managerial behaviour, skills development, and work organisation that often lie at the heart of poor practice and poor treatment of employees on all forms of contract.