We hadn’t seen it for a while, but on Friday, just like one of artist Andy Goldworthy’s more elegant creations in the summer of 2000, Ed Miliband’s zero-hours policy snowball suddenly appeared on the streets of Glasgow. Seemingly trying to kill two birds with one stone, the Labour leader sought to ‘re-energise his party’s faltering campaign against [Scottish] independence’ by taking his shadow cabinet to Glasgow and announcing the outcome of a review of zero-hours contracts for Labour by Norman Pickavance.
- Pic: the sketch is by isobel Williams and comes from her account of a day spent at the Hacking trial last week, see HERE
Pickavance is no fool, and his well-written and argued report (PDF) is bursting with persuasive evidence and insightful analysis. Early on, it notes that ‘zero-hours contracts are just one aspect of a much wider problem of underemployment and labour market insecurity since the economic downturn, during which period self-employment, temporary jobs, and involuntary part-time and short-time working arrangements have all increased’. Hear hear to that, even if it does beg the question of why Labour asked Pickavance to examine (and suggest solutions to) only this particular part of that ‘wider problem’.
Whilst accepting that ‘when used appropriately, zero-hours contracts can aid short term flexibility for employers and provide increased choice for individual workers’, Pickavance concludes that such contracts ‘are often used as crude cost-reduction tool’ and that ‘some organisations are using them as a way of managing their entire workforce, in place of good performance management and workforce planning systems’.
Arguing forcefully that the risks associated with fluctuations in demand ‘should at the very least be shared’ between employer and worker, and that zero-hours contracts ‘can push too much of this uncertainty onto the worker’, Pickavance sets out a series of policy recommendations. He proposes a ban on ‘exclusivity’ clauses that stop those on zero-hours contracts working for other employers when they are free, or that force such workers to be available for work at all times.
He takes up a suggestion by the CBI, the CIPD and others that workers be entitled to compensation when shifts are cancelled at short notice. And he proposes a new right for zero-hours workers to request a contract ‘which provides a minimum amount of work’ after six months, and a guarantee of such a contract after 12 months.
As George Eaton of the New Statesman was quick to point out, this last proposal actually represents a watering down of Labour’s previous position. Eaton notes that ‘back in September [last year], when Miliband addressed the TUC conference, Labour briefed that anyone working for a single employer for more than 12 weeks on a zero-hours contract would be given the automatic right to a full-time contract based on the average time worked over that period. Yet that period has now been extended to 12 months’. Eaton suggests that Miliband now needs to explain ‘why the rights of the bosses have trumped the rights of the workers’.
Far more significantly, to my mind at least, Pickavance’s analysis and policy recommendations are fatally flawed by a failure to address the question of how his proposed new legal rules would be enforced.
Given that the overall aim is not to ban zero-hours contracts altogether – that would be both impracticable and undesirable – but to prevent ‘exploitative’ use of such contracts by, presumably, deliberately exploitative employers, this lacuna is astonishing. Because rogue, exploitative employers will not transform themselves into law-abiding pillars of the business community simply because a Labour business secretary has passed some new law. They will change their practice only if that law is enforced – which in practice means if the workers in question can bring an employment tribunal claim (or, at the very least, credibly threaten to do so).
Yet, in his 20-page report, Pickavance makes just one, passing reference to the employment tribunal system. And there is no reference at all to the hefty, upfront tribunal fees of up to £1,200 introduced last July, and the dramatic fall in the number of claims since then. So Pickavance is unable to explain why exploitative employers would not simply ignore his new laws – by, for example, exploiting a zero-hours contract worker and then sacking them after 25 or 51 weeks.
As it happens, Pickavance’s sole reference to the employment tribunal system inadvertently highlights this fundamental problem. Noting that ‘the law around “mutuality of obligation” already protects [zero-hours workers]’ against being falsely classified as workers, as opposed to employees, Pickavance goes on to conclude that ‘in practice this is not well-enforced, and relies on an employee taking their case to an employment tribunal’.
Indeed. But, as things stand, the new law proposed by Pickavance would also not be well-enforced, as it would rely on (generally low paid) employees paying up to £1,200 to take their case to an employment tribunal. So if Labour does not fix that problem – by, at the very least, reducing claimant fees to a nominal level, as I have suggested on this blog and elsewhere – then Pickavance’s work will have been largely wasted.
The danger is that shadow ministers now fall into the common trap of believing that the answer to any problem is to add new law to the statute book, without thinking through whether that additional law will, by itself, make any significant difference.
Author: Richard Dunstan
Richard Dunstan is a policy wonk who has worked for Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK.