CIPD, the HR manager’s professional body, has criticised zero-hours employment contracts in a recent report. It found that the employer has more to gain from the arrangement than the estimated one million employees in these contracts.
https://www.cipd.co.uk/Images/zero-hours-contracts-report-aug-2022_tcm18-110465.pdf
It is used mainly in the hospitality sector, where 49% of employers value the ability to match customer flow with optimum staffing. It helps the labour cost KPI (Wages/turnover) to be at an ideal level. As wages is the biggest single cost in these businesses, it has a big impact on the bottom line.
From the employee’s point of view, it gives them flexibility in their working life and is valued for this reason.
However, it is sometimes abused by a small number of employers by:
- Not accepting an employees’ freedom to turn work down.
- Cancelling a shift at short notice or ending a shift early without compensation.
- Not offering enough hours.
The CIPD also highlighted that zero-hours contracts could negatively impact employee well-being and job satisfaction. Workers on these contracts often experience income instability, making financial planning difficult. Furthermore, they may miss out on benefits such as sick pay, holiday entitlement, and pension contributions, which are typically available to those on more stable contracts. The report calls for better regulation to ensure fair treatment and prevent exploitation. CIPD suggests that employers should consider the ethical implications of their staffing practices and strive for a balance that supports both operational flexibility and employee welfare. By promoting best practices and encouraging fairer contractual terms, CIPD aims to foster a more equitable and sustainable employment landscape.