Zero hours contracts: a ban would harm businesses and workers

Zero hours contracts were one of the hot topics at the last general election, and following New Zealand’s decision to ban the practice there has been talk of a UK ban, which could have a seismic effect on the food industry. So what are the alternatives and what could be done to ensure fairness for both employers and workers?

Firstly, it’s important to understand that banning zero hours contracts would not guarantee a minimum number of hours nor would it force or even encourage an employer to take on staff working a minimum number of hours.

In reality it might only serve to encourage contracts offering a small number of fixed hours, as currently operated by companies that use ‘four hour’ contracts.

Then there is the suggestion workers should become entitled to a ‘permanent’ contract if they work regular hours on a zero hours contract for a certain period. Employers could work around that by ensuring there is no regular pattern that would allow such a provision to bite.

It’s not as if zero hours contracts aren’t, in some cases, reasonable and sensible, too. Recently, I had a client who was embarking on a new venture and had a need for labour but no proper way to estimate the requirements or his ability to pay for it - due to uncertainty over the business’s success once it got up and running. So the client opted to offer zero hours contracts, just to begin with.

If there was an obligation to commit to fixed hours, that business would immediately have had a fixed cost to commit to - a potentially huge financial risk.

Conversely, the ban on exclusivity clauses in zero hours contracts was a positive development, which is manageable, enforceable and has not attracted much complaint from employers.

There may be other positive steps that can be taken; for instance, if zero hours contracts are retained, guidance could be created as to their use to encourage best practice, such as planning rotas well in advance.

An outright ban will not prevent exploitation but does risk real harm to businesses and those who genuinely want to work flexibly or for a limited number of hours each week.

Maz Dannourah is an employment law specialist at Roythornes