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The Government Must Rise to the UKs Changing Labour Landscape

The Government Must Rise to the UK’s Changing Labour Landscape

By Mark Mitchell, chief executive of Meridian Business Support

“This week has seen yet more debate regarding employment legislation in Britain and the EU, after Jamie Oliver suggested European immigrants are “tougher” workers than UK staff. The BBC’s primetime programme The One Show discussed the issue in an hour-long special broadcast from Gateshead, in which Meridian and myself were invited to participate.  And now news has emerged of a week-long strike amongst workers at the Hovis bakery in Wigan, with more than 200 staff taking action over the use of agency workers that union leaders claim are on zero-hours contracts.

Again, we must remind ourselves that these contracts are completely legal yet the lack of Government clarification around how they should be implemented means they remain linked with negative tales of how organisations have used zero-hours legislations to evade their employment obligations.  

If the Government had an intrinsic understanding of the UK labour market and the forces that compel it, then the wider public would know that these types of contracts are neither good nor bad. It is how and why they are implemented that should to be assessed and policed, if need be. A rigorous response to the media scrutiny of zero-contracts from the Government would have put these contracts into context with the general public. This could include examples of when they provide a win-win solution and when they are just being used by organisations to exploit workers and disavow their duties to staff as good corporate citizens. With this knowledge, the Government would also be able to enforce good citizenship on big brands. Tax might remain a moot point, but at least when it comes to unfair employment practices, there would be no debate about legal vs moral responsibility.

So what does the Government and the wider public need to understand about zero-hour contracts? 

Firstly, they are not that different from the & lsquo;standard’ temporary worker contract that has allowed flexibility and survival in the UK for the past five years, positioning firms to take advantage of the economy today. This agreement states there is no mutuality of obligation and no set hours between worker and employer. The fundamental difference is, of course, that traditional temporary worker contracts are administrated by a recruitment agency, so when applicable, agency worker regulations (AWR) are enforced, which provide equal pay and equal benefits to temporary workers. Indeed, the implementation of AWR in October 2011 has been cited for the marked increase in workers on & lsquo;zero hours’ contracts, as an organisation can cut out the agency, employ the worker directly and not be beholden to AWR and its implied costs.

The irony is that AWR was a robust piece of legislation introduced to protect the rights of the temporary worker, but yet again, which is so often the case in the UK’s fluid and adaptive employment landscape, loopholes were found to mitigate the cost implications of this legislation, with zero-hour contracts being just one of those.  However, few costs are cut when organisations hire flexible labour directly, because recruiting, maintaining and mobilising workforces have high levels of accompanying cost, traditionally borne by the recruitment agency.

Secondly, on the flip side of this coin, zero-hours, like any and every form of employment, is a good thing if used properly. It is a legitimate way of working where staff have flexibility without penalty. It has, in many respects, helped to keep the British economy going in very tough economic times.  When AWR was at risk of costing UK companies millions in additional fees that would have put many out of business, some employers established their own staff banks of zero-hours contracted employees in an attempt to reduce costs. SMEs need flexibility to be able to survive and grow this sometimes manifests itself as zero-hours contracts and, as long as both the worker and employer are content, the model is beyond reproach.

Perhaps if the Government was to apply the benefits of AWR to all temporary and flexible workers, regardless of if they are employed through a recruitment agency or not, then the myriad contracts and new models of employment would cease to baffle and cause undue sensation in the media.”

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