We need a full investigation into how the growing use of these contracts by Sports Direct and others affect society as a whole.
Reading the Guardian’s investigation into zero-hours contracts – used by Sports Direct for a staggering 90% of its staff, as well as by employers including Buckingham Palace, Cineworld and the Tate galleries – I came across this from a contributor to the Work blog:
“By working on zero contract hours you are incapable of organising a functioning family life. Your ability to keep your promise to be at your children’s school production or watch your nine-year-old son’s first football game becomes secondary to your employers’ whims.”
How can people be expected to live their lives in such a way? It is a life on edge. You don’t know what your working day will be, and you have no sick pay or holiday pay. While there are a small number of people to whom these types of contract might be suitable as they can bring some additional flexibility, there are concerns that zero-hours contracts are being abused and used to undermine employment rules. And as their use grows, we need to urgently consider the problems they can cause for people employed through them as well as the wider impact on the economy.
The systematic use of such contracts, as in the case of Sports Direct, is worrying. It can send a signal that the company is not concerned about holding on to staff or investing in or training employees, and this could have knock-on effects on service standards.
Prior to entering parliament I ran a number of small businesses, and through that experience I know that staff perform best when you respect them and give them confidence and stability through clear working hours and responsibilities. Many business people I speak to often say your business is your people – so what do zero-hours contracts say about those firms?
It is why a review is all the more urgent and I’m glad the government has finally agreed to this. But it must be a proper investigation and not simply a PR exercise.
We understand that three officials within the business department are spending part of their time researching how zero-hours contracts are being used. We have been told they are speaking informally to industry bodies representing sectors where they are in use and other organisations including trade unions. This is welcome but is a rather lightweight response to a serious issue.
Why is there no call for evidence or a consultation such as the Department for Business, Innovation & Skills has conducted on other issues, like scrapping employment rights? What is the impact on the younger generation already facing record unemployment levels? What is the gender breakdown in the use of these contracts and what is the effect on family life? How many people on these contracts are on or near the minimum wage? Are these contracts putting pressures on other staff and employment rights? And what is the impact on the taxpayer, who might need to pick up the tab through extra tax credits because employers are shirking paying staff properly?
This timid response is emphasised by the fact that not one Tory MP attended a recent Westminster Hall debate on this issue. It reinforces the Conservative party’s misplaced view that somehow removing employment rights will enable the economy to grow, while ignoring the fact that the UK already has some of the most liberal labour market laws in the world. What we are seeing is a return to an out-of-date ideological attack against people at work – it was wrong before as it is today.
What Conservative MPs need to do is go and see what is happening in some workplaces – see the insecure, low-paid, desperate economy they are helping to create. This is not a race to the top in the global competition but one to the bottom, with people facing bleak prospects.
As part of our policy programme, Labour is looking at how we can prevent the abuse of zero-hours contracts and the best way that these issues can be tackled. But this is the tip of the iceberg – the reforms we need must go much further. We will build a “one-nation” economy that is stronger and more resilient, where businesses that invest in staff are supported and where prosperity is fairly shared, with good, well-paid jobs that ensure fairness and security in the workplace.