East Anglia: Business leaders defend zero hours contracts

The number of workers on zero-hours contracts could be one million - four times as high as official

The number of workers on zero-hours contracts could be one million - four times as high as official estimates, according to new research - Credit: PA

EAST Anglia’s business leaders have defended the growing use of zero-hours contracts as the practice came under fire from unions.

The number of workers on zero-hours contracts could be one million - four times as high as official estimates, according to new research.

The Chartered Institute of Personnel and Development said its survey of 1,000 employers showed that one in five employed at least one person on a zero-hours contract, under which staff are not guaranteed work from one week to the next.

New Anglia Local Enterprise Partnership (LEP) chair Andy Wood, who is also chief executive of Southwold brewer Adnams, said his firm employed a very small number of staff - two to four out of a workforce of 400 - on ‘zero hours’ contracts. This was common across tourism and leisure businesses, which have seasonal fluctuations, across Suffolk and Norfolk, he said.

“There are some good elements to this - there is flexibility on both sides,” he said. “But equally it can be seen as less secure from the point of view of employees.”

He added: “We use it in a limited way. We use it to deal with the extreme peaks and troughs within our seasonal business.” But it was very important to treat staff well, regardless of what kind of contract they were employed under, as studies showed that they performed better. Bad employer practice would result in poor results, he said.

“We have been very clear that we absolutely do that - if not you are creating second-class citizens.”

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Mark Robinson of Unite, who represents members in Suffolk and Norfolk, said his office had seen a rise in queries about zero hours contracts over the last 18 months.

“It’s staggering that a million people are on these types of contract. They can limit people’s ability to claim benefits, there are problems with getting mortgages and other types of loan as a result of it. There’s no guarantee of work and flexibility appears to be 90% one way. If you say no, it’s may be a long time before you get another call again,” he said. “There is no place for these types of contract in a working environment and they are mainly used to exploit people who are in relatively difficult circumstances. They are used in places like retail. Well known high street retail names use these contracts now.”

Luke Morris, chair of the Suffolk branch of the Institute of Directors (IoD), admitted the contracts “may have some flaws” but said they were a flexible form of employment which some businesses have been forced to adopt because of the “inflexibility” of the UK labour market.

“It is employers that are busily getting on with driving our economy forward, not the politicians or unions,” he said. “A burdensome tax and regulatory system continues to hold our employers in the private sector back from expanding and taking on more staff. This, together with a sluggish economy, means such employee arrangements are inevitable. If the system was simplified, the issues around zero-hours contracts would disappear as quickly as they have arisen. Until then, their widespread use should be of no surprise.”

“The vast majority” of businesses his organisation spoke to in Suffolk had explored zero-hours contracts as a means of flexibly dealing with these issues, he said. “Inevitably, they will use them when the opportunity to employ arises. This is not in itself a bad thing. A corollary of flexible employment is lower unemployment.”

Chris Soule, chair of Suffolk Federation of Small Businesses (FSB), said small firms were very responsible employers and had good, strong relationships with their employees. “In some situations zero-hours contracts suit, for instance, students and people with small children, as they can work in a more flexible way. This is about responsible management, which small businesses are very good at. The key issue is about good employment legislation, which must give balanced protection and a healthy framework in the workplace for both the employer and the employee. As a member of the FSB, small businesses have the benefit of 24 hour legal protection, which ensures that they are protected and have the best possible advice at hand with regard to employment legislation,” he said.