Zero Hours Contracts – Are We One Step Closer To A Truly Agile Workforce?

imagesCAHIW1UVI believe it can only be  good for UK business that zero hours contracts are being taken seriously and that the pressure on the Government to provide guidelines for employees and employers is growing. The CIPD report following a public consultation has concluded that change is required to ensure the flexibility that can be offered by zero hour contracts benefits both employers and employees.

Flexible working contracts have become increasingly important for many businesses; allowing them to become more agile and competitive and improving employee engagement by giving employees the total flexibility they may need to balance complex home and working lives. At the risk of sounding repetitive, I believe a major issue that needs to be addressed by many organisations is that of making zero hours and other flexible contract employees easier for managers to manage. The way to do this easily is by using workforce management technology that can automate some of the processes needed to track employee attendance and schedule employees according to both business requirements and employee preferences.

Below are the four main recommendations made by the CIPD:

  • The use of exclusivity clauses in zero hours contracts preventing workers from working for another employer should be banned, with a narrow exemption for employers that can demonstrate a compelling business reason, for example, confidentiality or the protection of trade secrets.
  • CIPD recommends that staff on zero hours contracts should, after a minimum period of 12 months service with an employer, have the legal right to request a minimum number of hours per week.  Employers would have to respond positively to the request unless they had a business reason for turning it down.
  • The CIPD believes all workers should be legally entitled to a written copy of their terms and conditions not later than two months in employment (currently under the Employment Rights Act 1996 only employees are entitled to this). This would help provide greater clarity on behalf of both parties on the issue of employment status and the associated employment rights.
  • The CIPD would support the creation of a code of practice setting out for employers and zero hours workers some key principles and guidance on the responsible management of these types of working arrangements.

The full consultation can be downloaded here: http://www.cipd.co.uk/publicpolicy/consultation-responses/zero-hours-contracts.aspx

The full report, ‘Zero hours contracts: Myths and reality’ is available to download here: http://www.cipd.co.uk/hr-resources/research/zero-hours-contracts-myth-reality.aspx

Zero Hours Contract Debate Rumbles On

ZeroIt looks like the zero hours contract debate will be rumbling on in 2014 according to the Chief Executive of ACAS. In an article published in HR Magazine this month, Anne Sharp welcomes the Government’s decision to institute a 12-week consultation to produce guidelines for employers and employees to help clear up confusion. As ACAS have seen an increasing number of enquiries from employees concerned with changes in their terms of contracts this can only be a good thing. Zero hours can offer flexibility to both employers and employees but with a second reading due in the House of Commons of a Private Members Bill seeking to prohibit zero hours contracts – it is clear that some strong guidelines to protect employees and inform employers are necessary if they are to remain a part of the flexible working toolkit available to maintain the agile workforce required to support economic growth.

The key to ensuring fairness in the workplace is by being able to track and monitor zero hours workers time and attendance and put in place processes and rules that will show employers and employees are getting the best out of this kind of working practice.

I have always maintained that businesses need to be as agile as possible, however a mix of full-time, part-time and the highly flexible zero-hours contract workers are essential to retain talent and ensure business objectives are met. If you want to keep abreast of the zero hours debate you can find out more by visiting the ACAS or the Government websites:

http://www.acas.org.uk/index.aspx?articleid=4468

https://www.gov.uk/government/consultations/zero-hours-employment-contracts

Zero-Hours Contracts – Not So Evil After All?

Zero hoursThe CIPD zero-hours contract report was published this week and has sparked yet more debate in the press. The report is designed to address the issue that the ‘facts’ about zero-hours were in the main anecdotal and its aim, according to Peter Cheese, Chief Executive, CIPD, was to ‘gain insight into how employers actually use zero-hours contracts and how zero-hours contract workers typically view having no set minimum contracted hours as well as inform the debate about the proportionate response to address legitimate concerns where poor practice exists.’ The CIPD defines a zero-hours contract as ‘an agreement between two parties that one may be asked to perform work for another but there is no minimum set contracted hours. The contract will provide what pay the individual will get if he or she does work and will deal with circumstances in which work may be offered and possibly turned down’.

The findings from the report indicate that the earlier controversy around zero-hours contracts is in the main unfounded and the majority benefit both employer and employee.

The report suggests that in tough economic times employers have to find ways of responding flexibly to changes in demand without increasing labour costs. This leads to greater pressure on organisations  to design more flexible employment and working practices. Whilst, on the other hand, employees increasingly value and even expect greater flexibility over how and where they work in order to manage caring responsibilities, undertake further study, improve their work–life balance, or to move from full-time work as they enter flexibly into retirement.

With this need for today’s organisations to be more agile to remain competitive and the changing needs of employees to work more flexibly to achieve a work-life balance – zero hours contracts do appear to meet the needs of a small percentage of the working population; just 3.1% according to the latest CIPD estimate based on aggregated data from the summer and autumn 2013 Labour Market Outlook (LMO) surveys conducted in partnership with Success Factors.  

Here are some key statistics gleaned from the report:

  • The most common reason for using zero-hours contracts cited by employers is that these arrangements provide them with the flexibility to manage fluctuations in business demand.
  • Almost half of employers, who use them, say they provide flexibility for individuals.
  • Just 25% of workers report they are dissatisfied with having no minimum contracted hours.
  • Almost two-thirds of employers surveyed that use zero-hours contracts (61%) report that zero-hours staff are not contractually obliged to accept work and are free to turn it down.
  • Most zero-hours contract workers (52%) don’t want to work more hours than they typically receive in an average week, however, 38% would like more hours.
  • Only about a third of employers that employ zero-hours workers say they have a contractual provision or policy outlining their approach to arranging work with zero-hours workers or cancelling work that had been offered.
  • 46% of zero-hours contract workers say they either receive no notice at all (40%) or they find out at the start of a shift that work is no longer available (6%).
  • 60% of zero-hours workers report they are allowed to work for another employer when their primary employer has no work available (17% don’t know if they can)
  • 64% of employers who use zero-hours workers report that hourly rates for these staff are about the same as an employee doing the same role on a permanent contract. However, less than four in ten zero-hours contract respondents think their pay is the same as comparable permanent members of staff on contracted hours doing similar jobs.
  • Almost two-thirds of employers (64%) classify zero-hours staff as employees, whereas only just less than a fifth (19%) describes them as workers.
  • On average 65% of zero-hours workers say they are satisfied with their work–life balance compared with 58% of all employees.
  • Just over half of zero-hours contract workers would recommend their organisation as an employer compared with 56% of all employees.

On the whole the report offers a mainly positive view of zero-hours contracts. It would appear they fulfil a small, but necessary role in a workplace that increasingly requires more flexibility for both employers and employees. And as long as organisations understand their responsibilities and operate a fair system it would seem, interestingly, that employee engagement and loyalty amongst employees who work them is actually slightly higher than their contracted colleagues.

For organisations who want to know more about how to manage zero-hours contracts the CIPD has published some guidelines that you can download here.

Contents of the guide

  • Introduction
  • What is a zero-hours contract? 
  • Employment status: the big three 
  • Summary of legal rights and protections 
  • The pros and cons of status 
  • How to decide what contract to use 
  • Difficult issues: exclusivity, holiday pay, National Minimum Wage, Statutory Sick Pay
  • Summary
  • Appendix: Case law examples

Recent Press Coverage

http://www.hrmagazine.co.uk/hro/news/1140707/workers-happy-zero-hours-contracts-cipd

http://www.theguardian.com/commentisfree/2013/nov/27/zero-hours-contracts-problem-poor-management-flexibility-employers

An Expert View On….. Zero Hours

 

With Zero Hours currently  being such a hot topic – I thought you may be interested in this article published by Link2  earlier this week:

Neil Pickering, UK marketing manager at Kronos, discusses the growing trend of zero hour contracts and the workforce considerations needed to manage the changing employment landscape.

Much has been documented in recent weeks regarding zero hours contracts, prompted by a CIPD report claiming one million workers are on zero-hours contracts. Today Labour will host a summit on zero hours contracts with representatives from employers and employees to debate the growing trend of zero hour contracts and the workforce considerations needed to manage the changing employment landscape.

It’s encouraging to see business and government stakeholders prioritising the zero hours discussion and attendance at today’s summit from the likes of the Chartered Institute of Personnel and Development (CIPD); Confederation of British Industry (CBI); Federation of Small Businesses (FSB); British Chamber of Commerce (BCC) highlight this is very much on the nation’s agenda. Read the full article.

I would be interested to have you views on this  so please take part in our poll.

 

Zero hours & temporary contracts – A ‘quick fix’ or will they become the norm?

There has been much debate recently, following the CIPD’s revelation that the figures for zero-hours contracts are much higher than expected and are growing more popular with employers across many areas of the public and private sectors.  A consequence of the tough economic conditions – it looks like they may be here to stay – despite widespread criticism.

Zero Hours ContractsThe findings have prompted investigations from a number of organisations. In June The Department for Business, Innovation and Skills (BIS) started a ‘fact-finding’ mission into the benefits and disadvantages for both employees and employers of zero hours contracts. The Office of Rail Regulation said that the use of zero hours contracts had a negative effect on the attitudes and behaviour of those involved and “was not conducive to a safe railway.” And most recently the Government hosted parliamentary debate into zero hours contracts to explore the issues further.

The future for zero hours contracts is far from certain. The widespread press attention and interest from Government, unions, employment bodies and other organisations means that tighter legislation can only be a matter of time.

Another contentious development that has arisen on the back of the economic downturn has been the increase in the numbers of temporary contracts. An analysis of government statistics reveals that between December 2010 and December 2012 the number of temporary workers increased by 89,000 to 1,650,000 – that’s nearly half (46%) of the total jobs increase. This has given rise to warnings from the TUC that unless steps are taken to encourage better working practices and the creation of quality, permanent jobs; workers will suffer.

Whatever your views on these developments, it looks like these kinds of contracts, which can help give employees and employers flexibility; and have been born out of the necessity to meet the demands of tough economic conditions , are already here and look to become a common feature for the UK workforce.

Despite the pressures on organisations to increase temporary and zero hours contracts, I feel it is important for employers to get the balance right to ensure they keep their employees engaged and productive, as well as meet the fluctuating demands of their business. Managers should think about reviewing the technology they use to manage an effectively balanced workforce of full, part-time and temporary employees to create flexibility and a real competitive advantage to enable them to make the right decisions for long-term success.

I would welcome your views on these developments – has your organisation embraced zero-hours contracts? Have temporary contracts become the norm? What effect do you think these changes will have on the UK workforce?

‘Zero-Hours’ Contracts – What’s All The Fuss About?

ZeroAccording to ACAS There’s been a sharp increase in recent years in so-called ‘zero-hours’ contracts, as employers try to find cost-effective ways of meeting short-term staffing needs, particularly in the retail and hospitality industry. But, as ACAS advises, they need careful management.

This rise has led to the fact-finding mission that the Department for Business, Innovation and Skills (BIS) has begun into the benefits and disadvantages for both employees and employers of zero-hour contracts and covered in a recent article in Payroll World .

In the article Vince Cable says he is concerned about how little we know of the effect zero hour contracts have on employees and employers in the workplace and believes some employers may abuse this type of contract, using them to take on cheap, disposable labour and not treating them fairly, which is why he has ordered the report.

I first saw ‘zero-hours’ contracts some 15 years or more ago and have yet to see evidence that they are really a way forward for most employers. They are more often seen in retailers in the United States and generally fairly alien to the Europe workforce. There are many very successful retailers across Europe running without using many, if any, zero hour contracts and I am not convinced they are a prerequisite to running an efficient business.

Where employers have a good balanced workforce with a mix of full-time/part-time and flexible contracted employees and a fit-for-purpose workforce management system – there should be no problem meeting customer demand in most industries.

Although this kind of contract offers extreme flexibility for employers and in some instances can be a very useful, cheap alternative to using agency staff, where ‘zero-hours’ contracts are widespread, employee engagement will inevitably suffer and that negatively impacts both productivity and  customer service.

Ultimately, many employers need  a flexible workforce to accommodate the required levels of service delivery or production requirement and there are many alternatives that should be considered other than ‘zero-hours’ contracts. There are many people in the workforce that would relish flexible contracts; working parents and people furthering their education, for example. All of those add to a flexible balanced workforce, and in some cases ‘zero hours’ may be needed but I am yet to be convinced. In any case, anywhere that a workforce needs to be flexible – the best way to manage it effectively and fairly is still with an automated workforce management solution.