What's so bad about zero-hours contracts?
The issue of zero-hours contracts hit the headlines this week with business groups on one side citing flexible working opportunities and workers’ unions on the other calling to ban them.
At the start of the week the Chartered Institute of Personnel and Development (CIPD) put out data from a survey which revealed there are a million workers on zero-hours contracts - four times higher than official estimates.
These employees are not guaranteed work from one week to the next, and many must be prepared to leave their homes and families to travel across the UK to work at different stores and offices at short notice.
Following the research business secretary Vince Cable said zero-hours contracts are being abused and that he was concerned there was some exploitation of staff.
However it didn’t take long for AccountingWEB members to get involved in the discussion, with the majority getting behind this type of working arrangement.
In support of zero-contracts, ireallyshouldknowthisbut said: “My assistant is on one. It works really well for the both of us.
“She works when there is work, and on the odd occasion there isn’t any she goes home. Also means she can do the same to me, she has time off whenever she wants.”
mrme89 replied that in the above circumstances these types of contracts work well, but the circumstances described are in the minority.
“The problems arise when the employer believes this contract is one sided, i.e. they can give no notice or work to the employee, but should the employee refuse a few hours they won't give you any further work. They want the flexibility of the contract to be one sided. There needs to be safeguards in place to ensure flexibility is available to both parties without risk of terminating the employment.”
Mark Lee also waded into the debate, saying that the press had missed the point on the topic of zero-hours contract.
“It is an alternative for 'employers' who need a flexible workforce of independent contractors. The more common route is to insist that the contractors provide their services through the medium of personal service companies. If these contractors are paid as self-employed workers the employer ("BigCo") will be attacked by HMRC for failing to apply PAYE.
“The zero hours contract is a more honest solution than the personal service one as the contract recognises that the individual is an employee when working for BigCo,” Lee said. “IR35 then determines that their company must account for PAYE re work done as an 'employee' of BigCo.”
Old Greying Accountant added that zero-hours contracts should only be available to businesses that meet the small company criteria, regardless of whether sole-trade/partnership/LLP or Limited.
The An Accountant in Business blog also touched on the subject, saying zero hours is better than zero prospects.
He added that the CIPD figures made a “nice catchy headline”, but perhaps this is progress and without such contracts these workers would have zero prospects at all.
“Our noble, august and ancient profession makes much use of self employed contractors for book keeping, many of whom come in to work as and when required, some juggling between firms. It can be quite lucrative and convenient for many of them - do we hear them howling with complaints? Does the system work well for all concerned?” he asked.
What’s your take on zero-hours contracts?