Ed’s pledge on zero-hours contracts

After all the talk of reviewing and inquiring into the use of zero-hours contract a politician has actually announced a policy and proposed new legislation. I watched Ed Miliband deliver his speech to the TUC and make three specific pledges to bring in legislation:

• Banning zero-hours contracts requiring an employee to work exclusively for one employer
• Banning zero-hour contracts where the employee is obliged to be available for work but the employer isn’t obliged to offer any and
• Giving people a right to a contract for regular hours when that is in fact what they are working.

Of course it is one thing to propose legislation in Opposition, quite another to introduce it in Government. In Government you quickly come up against the harsh reality that someone has to actually draft the law that you are proposing – and that is when it starts to get tricky.

So what do we mean by ‘banning’? Will it be a crime to have those contracts? WIll clauses to that effect simply be declared void? Will an employee be able to sue for damages if an employer attempts to impose a banned clause? The only option that makes sense to me is to make it automatically unfair – with no requirement for a qualifying period –  to dismiss an employee who has breached one of the banned clauses by working for someone else or for not being available for work. Anything less than that is a token gesture that will simply be ignored.

But the law would have to distinguish between employees working for another employer to make ends meet because they are on a zero-hours contract and employees working for a competitor in breach of the obligation of good faith. Good luck drafting that one.

The law would also have to distinguish between an  employee who was not available to be called in at short notice on one or two occasions and an employee who never agreed to show up and was always turning work down. Would it really be automatically unfair to dismiss an employee who was simply never available for work? Striking the right balance would be far from straightforward.

Then there is the small problem of what kind of contract will be defined as a zero-hours contract. We can broadly say that a zero-hours contract is one which does not guarantee a minimum amount of work per week. But what if the employer guarantees one hour? Would that be enough to escape the three measures that Ed Miliband is proposing? If you take action against zero-hours contracts, how do you stop employers coming up with contracts that are just the other side of the definition but every bit as exploitative?

Then we get to perhaps the central proposal – the guarantee of regular hours. Frankly it is not possible to tell from the speech just what Ed Miliband is proposing here. If the rule only applies to workers who are in fact working regular hours, then won’t employers just be careful not to give regular hours to people? However, reading around the press stories it seems that the idea is that if you have been on a zero-hours contract for – say – 12 weeks, you will be entitled to a contract guaranteeing you at least the average number of hours per week as you have been working in that period.

If that is the proposal – and if anyone ‘in the know’ wants to explain what the proposal actually is then do feel free – then it is a hugely complicated idea that would cause all sorts of problems. Leaving aside the fact that employers would be careful to ensure that their contracts were not quite zero-hours contracts, I really struggle to see this working in practice. Wouldn’t it just lead to workers being sacked after 11 weeks on a zero hours contract? Even if that issue could be dealt with, it would create an incentive for employers to restrict the number of hours that new employees could work. A new recruit might be keen to work long hours for the first few weeks to clear some debts following a period of unemployment, for example. But doing that would increase the number of guaranteed hours he or she would eventually get so the employer will inevitably restrict the number of hours available.

In any event, having a range of different workers all with a different level of minimum hours based entirely on the hours they happened to work in the first 12 weeks of their employment seems a bit of an administrative nightmare. And how on earth would you enforce it?

Also, if you happen to be happy to work on a zero-hours contract (and some people are), would you have the right to opt-out of the minimum number of hours the law would require your contract to specify? Surely the law would have to provide for that. And if it did, how would you stop it becoming a semi-automatic opt-out like we have in Working Time? All workers have the right to refuse to opt-out of the 48 hour week, but how many vulnerable workers are really in a position to assert that that right?

I don’t think the legislation proposed by Ed Miliband will actually happen. Once the detail comes to be written and the consultation process starts it will all just get too complicated and cumbersome for something that is still not going to deal with the real problem.

The real problem is not the particular form of contract that employees are on, it is that some workers are vulnerable to exploitation by employers because they have no negotiating power. If they aren’t prepared to work on these terms, the employer can say, there is a queue of people outside who are.

The answer to the wholesale exploitation of workers is not legislation but organisation. It sounds old fashioned, but frankly exploitative and precarious employment strikes me as quite old fashioned too. The message to workers being exploited on zero-hours contracts should not be ‘wait for a Labour Government to legislate’ but ‘join a union’.

I think that’s what Ed Miliband should have told the TUC.