Companies Shouldn’t Use Zero Hour Contracts

David Cameron was grilled by Jeremy Paxman over zero hour contracts and food banks

David Cameron was grilled by Jeremy Paxman over zero hour contracts and food banks

Contrary to what both David Cameron and Ed Miliband said in the “non-debate, debate”; even if they personally disagree on the issue, zero hour contracts should not be banned. Let me explain, people who opt to work zero hour contracts in the first place do so not out of choice, simply to begin a career or gain some income which should be encouraged when no better alternative can be given.

Sure, companies see this as an easy hire and fire machine – I don’t agree with that. Companies can easily discriminate against a creed – I don’t agree with that. People’s working lives are put under scrutiny and pressure to continue to work – I don’t agree with that. Should we ban them? Of course not, let’s adapt the law to mean that people subjected to these contracts can survive, providing a better deal for the individuals. Zero hour contracts as they stand have no future because they fail to adequately motivate individuals to buy into a company ethos and its values.

Sports Direct, owner by Newcastle United chairman Mike Ashley, are the worst offenders for zero hour contracts

Sports Direct, owned by Newcastle United chairman Mike Ashley, are the worst offenders for zero hour contracts

In my personal experience, companies should never use zero hour contracts unless they are desperately in need to do so. Small and medium enterprises I can generally, understand but large companies should never even think about it.  But hat really surprises me is the use of these contracts in large companies including Argos, Tesco and Sports Direct (the worst offenders). Highly competent companies and structures that want to attract the best talent to their organisations. Contrary to whoever made these decisions, the most important part of a company is the area where the revenue is produced. The people on the frontline, who interact with customers are the face of the company. Who, if ever, sees the CEO’s of these companies? You don’t. Yet these contracts are primarily given to jobs that are low in the hierarchy. They provide no external security to employees. Is it any coincidence that none of these companies are not in the top 100 Times list of the best companies.

Taking Tesco specifically, they are active in a highly competitive market and are currently losing profit. Retail is an area I would predict that they would stop zero hour contracts because they toxic for your frontline staff. However, the pressure retailers are currently experiencing means there is little chance that the likes of Tesco will stop the practice.

Is Ed Miliband tough enough to ban zero hour contracts if he becomes PM in May? #HellYes

Is Ed Miliband tough enough to ban zero hour contracts if he becomes PM in May? #HellYes

Three areas where it can hurt a company due to zero hour contracts:

Firstly, as allured to before, employers want the best employees. But how can they be the best when they are not engaging some of their employees. It provides the wrong message of the companies and their values.

Secondly, suppliers do not generally like the fact that some of the companies they supply to use zero hour contracts. In my own experience, in which a company I worked for which used zero hour contracts, were more likely to be denied for future contracts as suppliers understand that employees are more likely to get back at the company in question.

Thirdly, customers understand and are aware of ethical considerations when choosing their retailers. Zero hour contracts can sometimes have a negative impact on customer service by employees.  Can companies think that saving a small amount of profit is a benefit in being able to be competitive? They can’t. In contrast, look at the Waitrose model. They do not issue zero hour contracts, in fact staff get shares in the shop they work in, staff effectively own the store. In which case, the better the store does, the more the staff earn – a good example of employment ethics and reasons for staff to give great customer service. Surely big retailers can see that this model has greater benefits in the long-term future of any store?

Waitrose staff celebrate receiving  17% bonus reward - a model to be admired

Waitrose staff celebrate receiving 17% bonus reward – a model to be admired

In some ways a zero hour contract can be beneficial but companies should always assess the risks before, they should be aware of the ethical impact it has and how it will profit both themselves and their employees.  Zero hour contracts are not likely to die, but for some reputable companies they should never use them because the impact can be far more negative on long-term profits, customer service and their reputation.

Although for some companies there would be several benefits of using zero hour contracts. There are reasonable arguments on both sides of the zero hour contract debate. If David Cameron is re-elected Prime Minister in May then there is no doubt that these contracts will be free from greater regulation. However, if Ed Miliband is Prime Minister after May then there is the hope that zero hour contracts as we know them now will be consigned to history.

By Philip Jordison, Junior Writer for Daily Political View.

Follow Daily Political View on Twitter: (DailyPoliticsV)

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