Zero hours consultation “flawed” – John Philpott

Business secretary Vince Cable’s consultation on zero hours contracts is “timid” and “flawed,” according to John Philpott, former chief economics adviser at the CIPD.

The Government consultation on proposals to improve zero hours contracts closes on 13 March 2014, with the Government expected to respond later this year.

Philpott has argued in a blog post that the consultation is “flawed” as it assumes that zero hours contracts will remain in widespread use: “The basic principle at the heart of the controversy over zero hours contracts – that employers should be able to hire people on contracts that offer no guarantee of work – has not been questioned”.

As a result, the consultation “addresses neither the fundamental injustice of a practice, which looks suspiciously like a 21st century version of the master-servant relationship, nor the various economic drawbacks associated with it”.

Philpott, who left the CIPD in 2012, offered an extensive list of economic shortcomings of zero hours contracts: “Zero hours contracts are unjust because employers bear none of the cost of uncertainty while those they employ have no guarantee of work and thus no security of income.”

The CIPD argued in 2013 that zero hours contracts have been “unfairly demonised“, with CIPD chief executive Peter Cheese commenting at the time: “Our research shows that the majority of people employed on these contracts are satisfied with their jobs. However, we also recognise that there is a need to improve poor practice in the use of zero hours contracts – for example, the lack of notice many zero hours staff receive when work is cancelled.”

However, as Philpott has written on his blog The Jobs Economist: “It is entirely right that zero hours contracts be demonised in a civilised society. Sadly, Dr Cable’s timid consultation will not lead to the end of the practice, but one can but hope that the end will not be too far away.”

Use of zero hours contracts is widespread. Nearly 600,000 UK workers were on zero hours contracts in 2013, according to revised data from the Office for National Statistics.

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Labour renewed its criticism of zero hours contracts earlier this week, when shadow business secretary Chuka Umunna argued that the increased use of zero hours contracts is contributing to “a rising tide of insecurity”.

What’s your view on zero hours contracts?
Do you think that zero hours contracts are good for employers and/or workers? Would you like to see any change to the present regulations relating to zero hours contract usage? Comment below…