ConsThey don’t specify set working hours or guaranteed income with employees in fear of losing their jobs. Thee are no fixed hours contracts, and it is used primarily as a cost-reduction tool. It can create financial insecurity for employees, uncertainty around entitlements to benefits and workplace stress. It’s not compatible with the goal to build a high skill, high wage economy. Can undermine employee engagement and good customer service. Furthermore, if used incorrectly can damage your firm’s reputation. Read more about zero-hours contracts:
- Businesses welcome government crackdown on zero-hours contract abuse
- Zero-hours contracts have been “unfairly demonised”
- Ed Miliband vows to fight zero-hours contracts
- McDonald’s wage
ProsIt provides flexibility for workers – they can say yes or no to shifts. Suits students, second jobbers and working mums wanting to get back into employment. You don’t need to offer permanent contracts, which could result in higher costs for the employer and less jobs. Working hours can also be set and agreed in advance, staff are entitled to holiday pay. The CBI believes without them UK unemployment may well have surged beyond three million during the recession. It believes zero-hours “enable businesses to respond quickly to changes in demand and allow workers to better manage their work life with other commitments. There are also many examples of zero-hours contracts providing a pathway into permanent employment for those who want to work this way”. According to a survey by HR professional body the CIPD back in late 2013 workers on zero-hours contracts were said to be “more likely to be happy with their work-life balance than other staff’. It said just over half of the 456 zero-hours workers it surveyed did not want more hours. The CIPD said zero-hours contracts, which are widely used in fields including catering, leisure, retail and the public sector, provide flexibility for workers and employers.
Best advice for employers using or wanting to use zero hours?Carefully study the legislation, give staff a written copy of the terms and conditions of the contract. Review their performance regularly and gauge their feelings about the contract. Do they want to change? Do they want more permanent hours? Prevent any disillusionment.
Legal viewPhilip Pepper, employment law partner at Shakespeare Martineau, said: “It often isn’t viable for employers to employ all staff on permanent contracts with set hours, and that is why zero-hours contracts have become more attractive. Although such contracts suit many employment situations there is often an ambiguity around what these types of contracts actually mean for the employer and employees – and that is often what causes the problems. However, as long as the employer has well-managed systems in place to support this type of contract, there is no reason why they can’t work for everyone. “Zero-hours contracts have previously been deemed controversial and open to abuse as a result of employers having multiple staff on such contracts, many of which are on ‘standby’ to cover busy trading periods if required. This combined with exclusivity clauses, which inhibited employees from working elsewhere, led to an unfair system for employees. “This was recognised and exclusivity clauses have since been outlawed.
McDonald’s seems to have its working practices in order by offering all staff rotas two weeks in advance and many employees welcome the flexibility. However, it would be wrong to assume that zero-hours contracts are suitable for all employers and they should seriously consider whether the benefits of the contracts are workable for their business.”
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