Home > General Politics, Labour Party News, Law > On being a zero hours employer

On being a zero hours employer

I employ 8 people on zero hours contracts, and I’m reasonably proud of that fact. Thus, when well-intentioned, influential leftie types like Tom Watson start the rallying call for the total outlawing of what I’ve been doing for about 8 years now, effectively branding my an exploitative bastard, I feel compelled to speak out in my defence.

A little background: I run***, with two fellow Directors though I make a lot of the running, a small social enterprise in the childcare and parenting support field – that is, to the outside it looks like a bog-standard but small nursery/after school club, but what happens in it is more than that because we have a social enterprise mission blah blah.

A few years ago, when I did employee contracts, like most small employers I didn’t reinvent the wheel, but used a template provided by the Pre-School Learning Alliance, effectively our trade body. This was a zero hours template.

And those contracts have worked just fine ever since. As a social enterprise taking on the challenge of addressing “market failure” i.e. providing services at much lower economies of scale than the commercial ‘big boys’ would even consider, we’ve had to shift work patterns over time as demand for our services has changed – to do otherwise would have made us financially unviable. Doing this with zero hour contract has meant that we’ve not needed to engage in formal consultation processes. But it’s also meant that our staff have been able to change their hours to suit their own life and work duties easily and flexibly. It doesn’t always happen entirely smoothly, but there’s goodwill on both sides, and it’s happened in a way which has cut down significantly on cumbersome management processes which actually get in the way of iterations and knock-ons (to other people’s hours) needed to find answers.

My point, though, is wider than one of self-justification for a contract-style now officially reviled by the left. Indeed, in order to avoid any future suspicions about our motives, I’m looking at updating contracts to the “permanent-variable” kind, but this won’t have any effect on the way we actually run things. The wider point is about tools in the right and wrong hands, and the tendency to focus on the tools, not the hands wielding them, in a way which does a disservice in the long run to those the left is supposed to be serving. It’s also, ultimately, about the ineffectiveness of state power when it comes to tackling capital-labour relations.

Take the exploitative bastards down at Sports Direct or McDonalds, for example. Introduce a zero hour contract ban, and before that ban is even through, their human resource people will have found a way round it. This might be the introduction of the one hour contract, alongside an enhanced mechanism for weeding out the ones who won’t comply. It might be something else more creative. But I’m afraid it’s fanciful to think that legislation of the type envisaged will lead to an overall increase in wage packets, even though the use of the zero hour contract has been a handy way to decrease them). But at the same time such legislation would potentially harm a non-profit business like mine, or put paid to some ‘sweat equity’ style businesses in which people without the wherewithal to take actual equity in a small panel beating start-up, for example, are happy to work for their mate Dave on the basis of a zero hours contract alongside some other work, in a way where both parties gain in what is, in human but not contractual terms, a joint enterprise. (Of course this can go wrong – read Roddy Doyle on burger vans for that – but that’s another matter.)

More fundamentally, this focus by the left on its use of legislation, when it happens to be in power, to bring about good things for the workers, can be an active though unconscious hindrance to the “real” job on the left of combatting the power of capital through the more effective tool at our disposal – solidarity (whether that’s in the form of latent/actual labour withdrawal or via co-ops/social enterprise). While it’s an unpopular idea, I still think* it’s reasonable to see the 1998 National Minimum Wage (NMW) as having been detrimental to workers in the long run, though its short term benefits were clear; witness the way in which the NMW has become the standard, not the minimum, in much low paid work.

In the end, Labour might be better off doing the hard yards on the re-unionisation of the labour force – something I’ve argued may be a positive outcome from Miliband’s recent forays, whether or not it’s intended – rather than the easy but narrow legislative victories still redolent of New Labour’s approach to state management**.

* I accept that I’ve never got round to researching the empirical evidence for the counter-factual assertions I made about this in my (correctly contested) 2009 post.

** See also, if you can be arsed, this post of mine at Labourlist on Labour’s currently theory-only aspiration to facilitate “a relational state”, also drawing on my micro-experience.

*** [update note] As I’m receiving a fair bit of personal abuse on twitter for this post, I’ll add that I and the other two directors are entirely unpaid, s set in out in our company constitution as Co Ltd by Guarantee without Shares. I didn’t put it in before as it’s not relevant to issue at hand.

  1. Dan Garrigan
    September 6, 2013 at 3:50 pm

    An interesting piece. As someone who works for a company that utilises zero hour contracts (though I would stress it is done in a fair way here) and as someone who has been on zero hour contracts and been happy with them, I think it is important that some counter arguments are made to those prevalent on the left at the moment. I think with tightening up of legislation on zero hours contracts we could rule out the worst misuses of them. I fear that the current mood could end up throwing the baby out with the bathwater – these contracts can have a legitimate place in the way we operate.

    I disagree with you fundamentally on the minimum wage. Indeed I think we should look at working towards living wage as a minimum.

  2. September 6, 2013 at 3:52 pm

    I am a trustee of a play charity in Bristol. Last year we actually moved all of the frontline staff onto zero hours contracts. This was a good thing. Before that, they were freelance which meant they had less commitment to the organisation and we invested poorly in their training and personal development.

    Do I wish childrens services was better funded, the work more consistent and the staff better paid? You bet. Do I wish they were better paid and had regular work? Yes. Am I pleased that staff are on zero hours contracts rather than freelance? You bet.

    I am a Labour Party member and a trade unionist. Thanks for writing this important post Paul

  3. Terry Casey
    September 6, 2013 at 4:28 pm

    I think you have to be fair to Tom here, I obviously can’t speak for him but IMO Zero hours contracts are an answer for those who want that type of freedom to work the hours they can but they are dreadful in general, the fact companies are using these contracts to drive down the cost of labour is disturbing, especially those companies that keep their employees at the end of a phone not knowing whether they will work or not. Can I just say here I am retired and can remember the gang masters in this country who employed people at the factory gate choosing those they wanted for a days work and dismissing those they didn’t, we moved on from that and sadly we are moving back. Tom who I respect highly must see the insidious threat to the working class with these contracts as I do.

  1. September 8, 2013 at 8:52 pm

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