The Rise of Zero-Hour Contracts in the UK: Economic Change and Labor Market Exploitation

Introduction

Over time, in the UK, massive budget cuts have been experienced in the public sector. Like fire in a lawn of dry grass, privatization of companies has intensified. These changes, which are significant determinants of economic change, are accompanied with a general attack of the terms and conditions of members of staff in organizations. Employers are using zero-hour contracts – the kind of contracts which have become more prevalent over the previous decade. Indeed, by no means are they a new phenomenon and neither are they unique to the UK alone. Zero hour contracts have become a matter of public discourse, particularly due to difficulty in putting an exact definition to them and their exploitative nature which raises concerns in the labor market. The general understanding is that a contract gains a zero-hour label where a broad range of arrangements which atypically require an individual to avail themselves for work, though the employer does not guarantee to provide any hours of work in a specified period, and only pays for the number of hours worked.

This paper aims at critically analyzing and evaluating the issue of zero-hour contracts in organizations in the UK to determine whether they lead to rank exploitation. This shall be done through a discussion of the practice of zero-hour contracts in the UK, the Rawl’s theory of Justice, utilitarianism and deontology and how these theories apply to the practice of zero-hour contracts.

The Practice of Zero-Hour Contracts in the UK

As aforementioned, the use of zero-hour contracts is on the constant rise across the UK economy. More and more members of staff work under zero-hour contracts and they are gaining nationwide concern due to the damaging potential of the contracts and implications they have on employee rights. The primary challenge concerning zero-hour contracts is the definitional problems. In 2003, during an Opposition Day parliamentary debate, the Secretary of State for Business, Innovation and Skills noted that it is difficult to have a clear definition for zero-hour contracts because they involve several contractual agreements which are greatly varied (Adams & Prassl, 2018). The Oxford University researchers define zero-hour contracts as arrangements which represent the different levels of work fragmentation ranging from the consistent and reasonably regular employment to a labor spot-market (AgeUK, 2016).

In 2015, employers were prohibited from applying exclusivity clauses on people working under zero-hour contracts to allow them to work with different employers at the same time so long as they would remain available. By 2016, workers who suffered any detriment due to any work they undertake beyond their zero-hour contract could press charges against the employer in an Employment Tribunal. People who work under the zero-hour contracts have minimum rights. They include the right, under the Equality Act of 2010, not to face discrimination, the right to receive pro-rated holiday pay and other rights for working time (according to the Working Time Regulations 1998), the right to receive statutory payment when sick (as long as the Lower Earning Limit are met), automatic pension enrollment, protection against unlawful deductions on wages, and the right to be given the National Minimum Wage (AgeUK, 2016).

In comparison to people under regular employment contracts, those under zero-hour face major drawbacks in the UK. For example, they have no precise level of regular earning which can provide certainty for meeting bills and making future plans, and many of the employment rights are variable and depend on the irregular working hours, yet they are well defined for permanent staff (UNISON Barganining Support, 2016). People under these contracts have to respond to calls, usually made on short notice, for them to attend work, and these calls tend to disrupt their lives away from work and in a way strains their families and means of caring for their dependents. Weekly income is usually inadequate and having made a zero-hour contract, it becomes hard for the workers to take up other forms of employment because they ought to be available for work when the employer requires them (UNISON Barganining Support, 2016). Considering that the hours offered for work is unascertained per week, the workers find it difficult to stage complaints or raise issues about a specific aspect of their service or work. In comparison with the regular permanent contracts, zero hour contracts are more prone to abuse. For example, the homecare sector schedules working hours without considering travel time between visits to a home which causes staff members to work for hours beyond their payment. The government has shown concern for companies’ (in homecare) deliberate use of such practices as a way of evading payment according to the national minimum wage. Also, lower rates of payment and few working hours translate to the minimum weekly earnings of zero-hour workers being £188, which is lower than £478 for permanent employees (UNISON Barganining Support, 2016).

Rawls’ Theory of Justice, Utilitarianism and Deontology

Rawls suggests in his theory of justice, that in order to develop a standpoint on the way society should be structured, the way duties and basic rights should be assigned to people and the way socio-economic advantages should be distributed to the society, principles of justice need to be defined. Simply put, a set of principles (of justice) is necessary when selecting from several social arrangements which determine how advantages are divided and agreements are underwritten according to the right distributive shares. An ideal society needs to be founded on the principles of justices, the kind of principles which every individual would choose were they in a neutral position of equality of duties and rights, or if they were acting rationally, in a manner exhibiting mutual disinterest. The neutral position is considered hypothetical where every person acts regardless of their class status, individual assets, personal abilities or aptitudes, and social position (Scott, 2003).

The doctrine of utilitarianism, according to Rawls, is the most sinister version of teleology. Rawls defines teleology as a theory which separates the good from the right and identifies the right but maximizes the on the good. As a theory of justice, utilitarianism recommends that the society is already in its rightful order therefore making it just, and major institutions are arranged in order to acquire the greater good of the people who are part of it (Arneson, 2008). Rawls argues that utilitarianism overlooks the distinctness and separateness of persons and fails to recognize that free persons would choose justice as the principles of regulating social cooperation under fair conditions, or otherwise, an original position (Arneson, 2008).

Deontology is derived from the Greek word “deon” which means responsibility or duty (Alexander & Moore, 2007). The deontological doctrine holds that the wrongness or rightness of an action depends on its adherence to rules, or a moral code. Deontology concerns itself with choices about what is morally forbidden, required, permitted. It is a moral theory which assesses and guides people’s choices on what they should do. Rawls’ theory of justice is deontological in nature, because on a moral ground, they are in agreement in support for the equality of every individual’s basic rights. They prioritize the right over the good, while utilitarianism, which also recognizes what is right, prioritizes the good.

Rawls’ theory of justice as fairness does not suggest that fairness and justice have identical characteristics. Instead, his point of argument is that the principles of justice in social agreements are made in fair circumstances where every person is in an original position of equality. Additionally, ‘justice as fairness’ suggests that the principles of justice are equally applied to every individual. The selection of justice principles should be done in a way that benefits every individual and not to merely be in favor of the interests of people in particular groups (Kymilicka, 1988).

Application of Rawls’ Theory of Justice, Utilitarianism and Deontology

Different parties have different perspectives regarding the zero-hour contracts. Employers are in favour of its application because of it benefits of flexibility in employment and its fostering of economic growth. Trade unions, which are commonly on the lookout for employee rights, regard zero-hour contracts as a symptom of unfair balance of power in the labour market. A number of the largest firms, such as Sports Direct and McDonalds, in the UK use zero-hour contracts. From Rawls’ point of view, the social structure in this context is the UK employment economy. The principles of justice as fairness relate to the application of zero-hour contracts and the existence of this contract creates inequality between permanent employees and zero-hour workers.

The companies which use zero-hour contracts regard workers under this kind of agreement as being “any time required.” Once hired, these workers present to the hiring companies high amounts of profit as they will incur lower labour wages (Xu, 2018). The employers also do not have to worry about employee indolence. From Rawl’s perspective, these companies are utilitarian in nature. The use of zero-hour contracts only yields a greater good for them in terms of flexibility and maximization of profit. They are ignorant of the principles of justices as fairness which implores them to focus on what is right. The contracts are unfair because of the damaging impact they have on the lives of workers under zero-hour agreements. Even though companies benefit having to incur fewer labour wages, the little amount earned by a zero-hour worker does not give them the opportunity to make significant future plans about their lives.

Also, while companies enjoy the flexibility of the cheap workforce, the workers remain uncertain of the number of working hours they will receive per week, and due to the short notice calls to work, it becomes hard for them to take up other jobs so as to increase their weekly pay. The efforts made by trade unions to lobby lawmakers into considering zero-hour workers in employment law is deontological in nature. Rawls would be in support of the work of trade unions because they play the role of an institution for moral correction. By considering zero-hour contracts as symptoms of unfair balance of power in the labour market, they are in pursuit for what is right (Arneson, 2008).

The opposite side of the coin reveals that zero-hour contracts of greater good to a considerable population. Apart from the exploitative employers, other beneficiaries consist older workers, who find zero-hour contracts being flexible enough, giving them ample time to juggle responsibilities as they transition into retirement. Low skilled workers can benefit from such contracts, although they are likely to have an exploitative work relationship. Generally, the unpredictable and exploitative nature of the zero-hour contracts render them unfit for everyone. Rawls’ theory of justice as fairness and the doctrine of deontology suggest the need for change in legislation regarding zero-hour contracts such that a balance will be created between employer interests and employee rights in the labour market, and employment rights will be endowed to zero-hour contract workers.

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Conclusion

To conclude, zero hour contracts are gaining popularity for their rank exploitation tendencies. Employers are using them as a means of avoiding to pay large amounts of wages to workers and as a shield from regulations from employee rights. People working under zero-hour contracts are faced with more disadvantages than advantages. Their payment is below the national minimum wage, and their weekly earnings do not guarantee them the opportunity to make plans for their future or meet their bills. In certain cases, the undefined working hours forces the workers to have to respond to calls to work on short notice. The application of Rawls’ theory of justice as fairness in this context reveals that zero-hour contracts are utilitarian in nature. The contracts result in a greater good for a few employees and employers that use them, but they do not ensure fairness and equality by failing to endow the workers with employment rights. Even the trade unions are against zero-hour contracts for their exploitative nature and cause of imbalance in the labour market.

Recommendation

Due to the exploitative nature of zero-hour contracts, different alternatives can be used. This includes giving permanent employees overtime payment, deploying of fixed term contracts, employing of part-time staff, providing contracts for annualized hours, and the use of agency staff over a short period. It would be advisable for employers to avoid zero-hour contracts and opt for the alternative options because zero-hour contracts have a damaging impact on the employer’s attractiveness to and ability to retain high quality staff. With time, zero-hours workers get demotivated to work and this could result in a decline in quality of services which reduces the continuity of the organization (UNISON Barganining Support, 2016).

Bibliography

• Adams, A. & Prassl, J., 2018. Zero-Hours Work in the United Kingdom, Geneva: International Labour Office .
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