The Unite Trade Union still claims that these contracts are used to avoid sick pay and holiday pay. In some quarters that might be true, but it is an abuse if and where it is the case.
Now Norman Pickavance, a former HR Director, is to lead an independent consultation at the instigation of Ed Milliband.
Milliband envisages banning the use of zero hours where there is no guarantee of work and insisting that those on zero hours should be able to work for more than one business. The former proposal largely neutralises the benefit of such contracts and both will blur the boundary between employees and self employed workers. The latter is always a problematic area between employers and workers, the courts and HMRC.
With intermittent work it is easy to see how sick pay might be “avoided” but holiday pay should still be provided. Some employers use “rolled up” holiday pay – adding 12.07% to the hourly rate to cover it. Although technically unlawful, it is a convenient and practical way to pay holidays for those who do intermittent work. But if “zero hours” employees are doing regular work then any ethical employer will be insisting on, and be paying, holidays. Avoiding sick pay abuse (by employer or employee) may be tricky.
But with the regular work that Milliband is targeting, sick pay is practical to administer and most probably is being paid where appropriate, and certainly by principled employers.
Zero hours contracts have been around for decades. The courts provide opportunity for remedy in cases of serious abuse. Given most employees claim to be happy with their contracts it is curious how this has become a cause célèbre.
In the light of the choice of chairman it is noteworthy that the retail sector is an extensive user of this type of contract. We shall await with interest the verdict of Morrisons former HR Director.