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Zero Hours Contracts: Where Does the Buck Stop? Asks Meridians Mitchell

& lsquo;Zero Hours’ Contracts: Where Does the Buck Stop? Asks Meridian’s Mitchell

This week ITV news highlighted the employment practice known as & lsquo;zero hours’ contracts, but the programme merely scratched the surface of the issue by only discussing the pros and cons for those engaged in this way of working. The piece failed to explore the key reasons for the marked increase in the numbers on & lsquo;zero hours’ contracts the implementation of AWR in October 2011, the dramatic cuts in public sector spending and endless bureaucracy and financial burden that SMEs have to (and no longer can afford to) endure to employ staff.  Equally, the programme demonstrated that, like Government, the media doesn’t fully understand the UK’s economic reliance on the agility and dynamism of the labour market.

SMEs need flexibility to be able to survive and indeed grow. This sometimes manifests itself as & lsquo;zero hours’ contracts and as long as both the worker and employer are content, the model is beyond reproach.

& lsquo;Zero hours’, like any and every form of employment, is a good thing if used properly. It is a legitimate way of working in which staff have flexibility without penalty. It has, in many respects, helped to keep the British manufacturing economy going in very tough economic times.  When AWR was at risk at costing UK companies millions in additional costs that would have put many out of business, employers established their own staff banks of & lsquo;zero hours’ contracted employees in an attempt to reduce costs.

There are of course downsides to this way of working big employer brands seeing potential cost-savings are taking advantage of the practice. Job seekers relying on brand equity are signing up to these employers hoping for a regular income and work patterns that do not always materialise. And in many respects, even if & lsquo;zero hours’ contracts work out well for the employees, there are few costs cut because recruiting, maintaining and mobilising workforces have high levels of direct accompanying cost.

The point is that the UK’s labour market will always remain flexible and intuitive. There will always be winners and losers – but the upshot will be robust employment. The wider issue remains, however, that Government is the cause of many of these issues, and remains out of touch with the reality of the UK workforce. And with auto-enrolment and RTI, we are going to see more of these types of & lsquo;zero hours’ models of employment in the future.

Mark Mitchell, chief executive of Meridian Business Support


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