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UK Government: establish an urgent formal inquiry into Zero Hours Contracts

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Zero Hours Contracts is a trend which needs urgent scrutiny, debate and consultation between conflicting stakeholder interests; healthcare (and outcomes), economic, social, political, welfare, corporate and commissioning. Democratically, Parliament must decide whether the hidden costs to the State and individual of the routine casualistion of labour in the UK are acceptable and question whether some of the extreme employer practices identified here are legal.

The best way to achieve relevant stakeholder engagement is through urgent, full, formal Parliamentary select committee inquiry. By supporting this petition and the request for urgent and proportionate action, you will encourage Nick Clegg and Vince Cable to demand access to real expertise and a full range of resources, avoiding damaging delays. The issue does require cross-party scrutiny; numbers of Labour-controlled councils employ staff on these contracts. 

A Zero Hours Contract means that staff may be ‘on call’ to their 'employer,' yet not know how much, if any, work and pay they will receive tomorrow, next week, or at any point in the future and may mean no holiday pay or sick pay. 'Staff' so contracted may also need to seek permission from their 'employer' before taking on other casual work to fill in any earning shortfall. This is the 'casualisation' of Britain’s workforce. The practice is immediately relevant to the current and future commissioning of outsourced public services by managers tasked to meet austerity budgets particularly in the NHS and further education sectors.

Employees aged under 24 or over 55 are twice as likely to be employed on zero hours contracts, and concerns about age discrimination need examination. The Daily Mail reports people so employed must also resign themselves to earning half what contemporaries in conventional jobs earn -  if offered any shifts at all. Graduates on zero-hours contracts receive an average of £10 an hour, compared with £20 for those with set hours. People so employed complain of difficulties obtaining and repaying mortgages and loans.

Channel 4 News investigation found former workers at Amazon's Rugeley warehouse employed on these terms were subject to personal GPS tagging, timed and monitored toilet breaks with punishments for talking during shifts of 15 miles of walking. Turning Point, a charity supported by Princess Diana, dismissed hundreds of staff, only to rehire them on zero-hours contracts. Some workers are taking the charity to a tribunal over the move, which could leave them up to £6,000 annual deficit in their income. Hotel, Leisure and Catering are disproportionate in the extent to which Zero Hours work is offered.  McDonalds is potentially the biggest zero-hours employer in the private sector after admitting 90% of its entire workforce in Britain, or 82,800 staff are contracted on the controversial terms, as are 87% of Sports Direct's staff, 80% of JD Wetherspoon's workforce  and all of Cineworld’s part-time multiplex staff.  Subway, the Spirit pub chain, Buckingham Palace and Tate Catering are also implicated, as is the National Trust.   Many people so employed complain of bias and discrimination, as the hours offered by managers are seen to reward 'favourites' or the most compliant staff - 'To get the shifts you wanted, you had to be nicer to the managers than you would otherwise have been - and for pitiful pay.' Some of the organisations listed on this page are backed by aggressive private equity firms, which have previously attracted substantial criticism for riding roughshod over workers' basic rights. 

The High Street chemist Boots, which claims to have a 'very limited' number of zero-hours contracts, expects some zero-hours workers to go abroad at short notice. 'There is no requirement to be based permanently outside the UK, although you may be obliged to work abroad for short periods'.

The think-tank the Resolution Foundation, said: "If it's true that there are in the region of 1 million people on zero-hours contracts, then that would be a substantial portion of the workforce – this could no longer be dismissed as an issue affecting only a tiny minority."

The commercial risk of variable demand was traditionally managed in organisations (public or private sector) as an integral part of day-to-day general management, undestood by financial management with diligence overseen by risk management. The balance of supply and demand was usually well understood by the whole business as a consequence.  A Zero Hours Contract shifts the balance of risk onto the lowest-paid and most vulnerable employees' shoulders. Are business who win public sector tenders through unrealistically low bids or private sector businesses in competition with their peers REALLY competitive or viable if that have to ask their lowest paid front-line staff to subsidise routine business risks? And who pays when there is no work – what are the social, economic and welfare implications? 

Short-termism and an amoral view of cost control does nothing to promote service quality or ownership of a business' core offering. How can we expect staff under these pressures to perform to a quality standard, and what right do we have to complain if morale and staffing levela are dire or service standards suffer as a consequence? What happpens to public services in particular the NHS and care of the most vulnerable when all of this goes wrong?

We should ask ourselves whether we want to allow businesses to be run with hidden internal subsidies where part of core management diligence (in the management of demand and supply) has been abdicated. Is it right to ask the lowest paid front line staff to take the commercial risks that the businesses have traditionally taken (the risk of fluctuating work volumes)? Would the organisations named and shamed not be better placed managing critical commercial concerns such as other aspects of operational risk or of quality management to ensure more efficient pathways and effective performance delivery? Surely it's now time to reflect on the true cost of the lowest cost / lowest retail price mentality.

Nick Clegg is aware of the issue. Vince Cable’s investigation has been branded “inadequate” in its depth of consultation and if nothing changes he will preside over a limited review with comparatively minimal resources without the input of key experts and relevant stakeholders. 70% of projects fail to deliver the benefits expected of them due to lack of adequate stakeholder engagement. What is required is an urgent formal cross-party review or select committee inquiry with access to real expertise and resources. A robust and well informed body with proper knowledge can then take a view on current practices and task CEOs and Shareholders, including Jeff Bezos founder of Amazon, to explain their short-termism in HR policy and why this is different in the UK, whether public sector bids or private enterprise are really operating legally,  viably or legitimately within competition law if they have to be cross-subsidised by their lowest-paid staff whilst passing on the costs to us is poor service, an increased UK welfare bill or both. This needs urgent debate.

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