Zero Hours Contracts: A Barrier to Employment Security

The Orkney News has been running a series of weekly articles on zero hours contracts. Last week we revealed through a Freedom of Information request that Orkney Islands Council employs 1009 workers on zero hours contracts which includes 330 since 6th April 2016.

A zero hours contract has no guaranteed minimum number of hours. It is linked to in work poverty and inequality.

Defending OIC practice Steven Heddle, convener, commented on the article by The Orkney News saying that :

“the council pays all its staff at least the Living Wage plus Islands Allowance, which is hardly exploitative”

The council should be congratulated on this policy,however, there is a world of a difference between paying an hourly Living Wage rate and actually having a wage that you can live on. If there are some weeks when you have no or very few hours work,  which can happen with a zero hours contract, then it is clearly not a wage that you can live on.

Councillor Heddle also points out the flexibility of zero hours contracts. NHS Scotland backs up this view. An internal briefing by the Directorate of Health and Workforce Performance for NHS Scotland, states

“that if NHS Scotland was unable to use zero hours contracts this could result in the inability of NHS Boards to respond adequately to spikes in demand, and planned and unplanned absences. It could mean that cover that was unable to be provided internally and staff may have to be sourced through private Staffing Agencies.” (24/03/2015)

It is also the case that some students and seasonal workers prefer the flexibility of having a contract where they have no regulated hours.

Citizens Advice Scotland, however , state:

‘Whilst zero hours contracts may be suited to particular types of work, such as casual or seasonal labour, the misuse of zero hours contracts is becoming a major problem, which should be addressed to prevent exploitation and hardship. Misuse can include situations where zero hours contracts are issued by employers inappropriately, such as where a full-time or part-time contract may be better suited and have led to a number of serious problems for CAB clients including destitution caused by a lack of work; serious debt and budgeting difficulties caused by a fluctuating income as well as difficulties accessing the benefits system.” (30.09.2015)

So whilst the employer benefits greatly from zero hours contracts and it also suits the lifestyle of some people it is hard to see how the large number being issued by Orkney Islands Council is what most employees would like.

The Orkney News has evidence that at least one council department has sent out a P45 to a worker on a zero hour contract with no covering letter, no explanation, just the P45. And this is one of the essential things wrong with contracts where the employee has no regulated hours. The employer has the greater advantage.

In a report for The House of Commons it is stated:

“Balance of power in the employment relationship: Our review found that people perceived they would be penalised if they did not take hours offered even if the hours were offered at very short notice and did not suit. This meant it could lead to a climate of fear that a person is less likely to be offered regular work in future if they failed to accept the hours on offer” (HoC Briefing Paper,Zero-Hours Contracts, No 06553, 03/10/2016)

In the same report Unite the Union said:

“Unite believes that in general zero-hours contracts are unfair, creating insecurity and exploitation for many ordinary people struggling to get by. They are one of many forms of underemployment blighting the British economy. Employers use them to cut wages, avoid holiday pay, pensions, or other benefits enjoyed by employees and agency staff.”

Neil Findlay MSP,  Convener to the Health and Sport Committee in the Scottish Parliament said that social care workers on zero hours contracts:

” were reluctant to take any time off work even when unwell. As well as being unhealthy for the member of staff, this creates a risk of cross-infection to clients, many of whom would be frail and vulnerable.”

“Many staff seem to be on what was referred to as “nominal-hour contracts” with a 10-hour or 15-hour contract but regularly working 20 to 25 hours. It was suggested those who wish to work full-time hours would almost certainly have to work split-shifts. Sometimes split-shifts were beneficial, if they had a big “split” in-between. We heard this allowed some to carry out other jobs between shifts. However, others only had a couple of hours in-between preventing them from doing anything productive.’  (26 October 2016)

Figures from OIC show:

  • Employees on permanent full time contracts                       807
  • Employees on permanent part-time contracts                     944
  • Employees on temporary full time contracts                         100
  • Employees on temporary part-time contracts                       162
  • Employees on zero hour contracts                                           1009
  • Employees on zero hours contracts since 06/04/2016          330

It can be seen that Orkney Islands Council has a very large number of workers on zero hours contracts and also on part time contracts.

Keith Brown, on behalf of the Scottish Government,in answer to a question from Pauline McNeil, MSP said:

“the Scottish Government is doing everything it can to promote good working practices with the powers available to us. This includes publishing Statutory Guidance Addressing Fair Work Practices. This guidance makes it clear that a positive approach to fair work practices can have an impact on the quality of services, goods and works.”(26/10/2016)

And Health Minister for the Scottish Government Shona Robinson said:

“The Scottish Government expects all employers to adopt fair working practices. The Fair Work Framework states that zero hours contracts can be a barrier to providing employees an appropriate level of security. We believe that the operational flexibility offered to employers by zero hours contracts can be gained by offering flexible guaranteed hours contracts that meet the needs of the employer without burdening workers with uncertainty of income.” (28/09/2016)

All the evidence shows that zero hours contracts are linked to in work poverty. And because women and young people are more likely to be on these contracts they are, therefore, also linked to equality issues and the gender pay gap.

The practice of an employer who is able and does dismiss an employee with no explanation  or forewarning demonstrates the lack of security that any worker has on a zero hours contract.

The Resolution Foundation and the Work Foundation both report that those employed on zero hours contracts tend to receive lower gross weekly pay and that workplaces that utilise the contracts tend to have a higher proportion of staff on low pay.

It cannot be good for the economy of Orkney to have a system that perpetuates low pay and a reliance on top up benefits. It cannot be good for the welfare of those employed on zero hours contracts that they have no work security, no feeling of being valued and no recognition of their skills.

It is very difficult to understand why the OIC is unable to engage in work force planning, taking into account budget constraints and demographics, that would result in most employees being offered contracts with regular hours of work. The high number  employed on zero hours contracts by OIC is quite extraordinary and if the practice continues at its current rate Orkney will continue to have a high rate of people on low incomes and a local economy subsequently affected by it.

Reporter: Fiona Grahame

Picture of Albert Street,Kirkwall copyright of Oliver Dixon

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