Zero hours contracts can be a blessing or a curse

The fast food chain like to utilise zero-hour contracts. Picture: Phil Wilkinson

THOSE friendly faces who flip the burgers and serve up the fries have become something of a political football. Recently McDonald’s, the world’s biggest fast food chain, admitted that 90 per cent of its UK staff are engaged on zero hours contracts (ZHCs), potentially making it the UK’s largest zero hours employer, with 82,800 staff engaged on contracts that do not guarantee work or a regular income.

McDonald’s came out in defence of the practice, saying that the company notified its staff of their shifts two weeks in advanced and all staff were allowed to work elsewhere if they wished. The company has said that many of its staff are parents or students who are looking to fit flexible, paid work around their childcare, study and other commitments.

However, there were calls from Labour MP Andy Sawford for McDonald’s to lead the way on addressing the issue, stating that it was indefensible not to put staff who worked regular hours on to genuine employment contracts. In Scotland, the SNP has stated it would like to abolish such contracts. In response, the UK boss of McDonald’s was interviewed on the BBC last week saying that “jobs at McDonald’s are good jobs” and pointing out that staff are trained well and “proud to work for the company”.

So what is all the fuss about? Zero hour contracts are contracts that do not contain a minimum number of guaranteed contractual hours. The amount that workers who work under ZHCs get paid is therefore dependent entirely upon the number of hours that they work.

They are seen to be of a benefit to employers because they allow them to promote flexibility in the workplace. But some workers and unemployed people associate these contracts with an increase in uncertainty about their potential income, being unable to see from one week to the next the amount of income that they will receive.

There can, however, be no doubt that they are of benefit to certain businesses. They allow employers to recruit additional staff and to ensure that they have a sufficient pool of skill and resource within their businesses without having to commit to guaranteeing extra hours. They therefore enable businesses to be flexible and reactive to the demands of the marketplace, ensuring that costs are controlled and competitiveness maintained.

Business leaders argue that this is good for both the economy and the consumer, ensuring that prices are low and UK competitiveness maintained.

For workers, the positive aspects of ZHCs are that these contracts allow staff the flexibility to decide what hours they want to do and enables them to turn down hours that they do not want to work.

The downside for workers is that they may not get offered enough hours to provide them with the income that they need. They may also be constantly working with the fear that they have no real security around their income level. They may, in some cases, also be called to work at very short notice, with the reality for some of working under such contracts being far removed from vision of flexibility that is often promoted.

Certain types of worker clearly do find them beneficial, and businesses with a staff pool drawn from workers who are genuinely looking for flexibility will no doubt have a happy pool of workers for whom ZHCs allow them to organise the flexibility they need.

However, for other workers, ZHCs will be seen as something that they have to agree to because they have no other choice. Ultimately whether the contracts are genuinely beneficial in practice will depend much upon the philosophy and approach adopted by employers toward their use. McDonald’s prides itself on ensuring that its staff receive their shifts in advance, and ensures that staff on its ZHCs receive exactly the same levels of training and benefits as those engaged on permanent contracts.

Arguably it could be seen as a responsible business operating ZHCs in an environment where they are suited to both employer and worker.

There will of course be other employers who do not adopt the same approach and philosophy, and for whom their staff will find the contracts that are forced upon them as leaving them with little or no security in as workers in today’s modern economy.

• Nick Jones is an employment law partner with Lyons Davidson, who are members of the national UK network, United Employment Lawyers, which is run by lawyers: www.unitedemploymentlawyers.co.uk