The big problem with Labour’s zero hours contract policy: it could make things even worse

“I couldn’t live on a zero hours contract,” Ed Miliband told the crowd and indeed the nation during the non-debate Paxo debate. So why then has he come up with a policy that will offer at least 80% of those currently on zero hours contracts what amounts to no help at all, and actually very likely make things even worse for all zero hours workers, while trying to make out that he’s eradicating the problem?

Let’s break down Labour’s latest policy announcement on zero hours contracts. It’s fairly straightforward: Labour would introduce a law that would mean that anyone working a zero hours job who has done regular hours for twelve weeks would have to be moved to a fixed contract. It’s one of those policies that sounds all right until you start to pick it apart even slightly. So let’s pick it apart.

First of all, statistically speaking, only 38% of zero hours workers do what would be described as regular hours at present (which let’s take at 35 hours a week, although Labour’s policy announcement is predictably vague on what defines “regular hours”). So that would seem to imply Labour’s policy would only help 38% of zero hours workers. Yet actually, it’s worse than that. How many zero hours workers do 12 weeks straight regular hours? I’ll take a very friendly to Labour’s policy approach here and say half of them do (this is very generous, but like I say, let’s just for argument’s sake say half). So that’s 19% of zero hour workers who get helped out by the policy at best.

But actually, it would almost certainly be worse than that even, as we haven’t got on to the worst element of the whole policy yet. And that is that it places the power over all of this in the hands of the zero hours employers themselves, the ones Labour are supposedly supposed to be punishing with the policy. Because with zero hour contracts, who do you think decides who does the full twelve weeks of regular hours in the end? That would be the employers themselves. Those employers offering the zero hour contracts in the first place.

A zero hours contract means the employer is under no obligation to offer any hours of work to the employee. By the same token, the employee isn’t obligated to work any hours either, but given that most people would rather work fixed term contracts if they can get them, most zero hours workers are those who cannot find fixed term work. Thus, the employer has an inordinate amount of power in the relationship. Given this, what’s to stop a zero hours employer not asking his zero hours employee to work regular hours for eleven weeks and then tell them not to come in for the crucial twelfth? Or even worse, Labour’s policy could make zero hours employees’ lives even more difficult by encouraging randomness into the system. Why not ask people to work fifty hours one week and then ten the next and ten the next, followed by a week of sixty hours? That way, the 12 straight weeks regular hours is never possibly reached. So we can see that if it’s all about 12 weeks in a row of regular hours, that’s an easy thing for a zero hours employer to get round – while making life even worse for the zero hours employees than it already was.

For those that dispute this would happen in practice, I bring up two things. One is that in Canada when I lived there, employment law stated that a raft of benefits were due each employee who worked “regular hours”, which was pegged at 37.5 hours per week (this might still be Canadian employment law for all I know by the way; I rather purposefully don’t know anything about the state of such things these days). So a lot of employees were asked to sign contracts stating something along the lines of “the employee agrees to work 36 hours per work and no more, and in fact agrees that all hours worked above 36 hours are to be worked pro bono”. So not only did you get screwed out of your entitlements, you got screwed out of the pay you would have received for the hours you worked over the 36 that you ended up having to work anyway.

The second thing is if you consider zero hour contracts evil, why do you think those who utilise them wouldn’t employ very easily implementable ways around legislation that attempts to make them redundant? There’s a dangerous circular logic at play there.

So in conclusion, not only will Labour’s policy to “end zero contracts” do no such thing, it might even make the whole scenario for zero hours workers even worse. Great.