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Zero-Hour Contracts: The Capitalist Dream


Written by Rachel Murphy (2nd year LL.B)

We live today in the golden age of capitalism; the longest surviving economic order. This is a time in which anybody from anywhere can prosper on the basis of hard work. However, it is not surprising that capitalism is often criticised. It is, after all, founded in the natural greed of humankind. It is obvious that while some are very rich, others will be very poor, and that the rich will be more powerful. This has all been somewhat accepted and stabilised by the state. However, as the economy -and so politics- continues to be dictated by a small number of corporate owners, it is becoming increasingly difficult to prosper.

 This may also seem unsurprising in light of the Marxist critique which says that workers are exploited through this economic system; but has the introduction and popularisation of zero-hour contracts taken this a step too far? This method of employment -whereby workers have virtually no exercisable rights- first became popular in low-paid, unskilled jobs, but is now spreading into other types of employment. Under such a contract an employee is expected to be available to work if needed, but is only paid if actually used. This is compliant with both the National Minimum Wage Act 1998 and the Employment Rights Act 1996; but is it acceptable? There are many people desperate for work who are subsequently forced to accept such a contract of employment, even though it offers no guarantee of a reliable income. It could be argued, therefore, that the zero-hour contract goes beyond the necessary evils of capitalism as it goes against that which people seek in employment: security of income, which in turn secures family life and the ability to get a mortgage. Surely the least one can expect from our employer is the guarantee of work and pay? It is estimated that in the UK there are over one million zero-hour workers,[1] some of whom even work for publicly funded institutions such as the NHS and care sector.


However there are industries in which such a contract may be necessary, such as retail and the service sector. It cannot be denied that a business would benefit from being able to staff itself as required day by day; but where should the line be drawn between businesses which require this and those that do not? Regardless, it is not the case that a business would need to roll this out across its whole staff. Having any more than a small percentage of staff on a zero-hour contract seems immoral since the balance of power then lies wholly with the employer. In this situation the scope for abuse is huge. Staff have little rights since, in speaking up, they risk being given no shifts which is entirely legal and could not be queried.


In a recently published research report, the Chartered Institute of Personnel and Development (CIPD) found that 17% of zero hour workers are sometimes penalised for not being available to work the hours they are given.[2] Additionally, staff know that they could easily be replaced because of the high levels of unemployment and so have little choice other than to put up with how they are treated. The flip side of this is that there are people employed under zero-hour contracts who work regular hours for a substantial period of time. In this way, employees will sometimes not have the correct holiday allowance for the hours that they are working and may not be paid overtime wages when they should be. The trade union Unite is one of many campaigning against the use of these contracts, saying that "employers use them to cut wages, avoid holiday pay, pensions, or other benefits enjoyed by employees and agency staff".[3] There is no good reason why people in this situation should not have a contract which actually represents the work they do. This is “a culture in which employers are allowed to treat their workers as disposable cogs in a commercial machine”[4] and so it is no surprise that the zero-hour contract pushes workers to the extremes of what they are willing to accept in the name of capitalism.


The defence of companies using zero-hour contracts is often that it suits a lot of their workers, such as students, young people or the elderly, because it affords flexibility for part-time work. In the CIPD report, 47% of zero-hour workers questioned said that they were satisfied with having no set minimum hours in their contract.[5] It seems possible that this is why the zero-hour contract has been accepted without more fuss; it is generally students or pensioners who tend to be given them.[6] In spite of the fact that this may entail taking advantage of naivety, it is fair that most people with a part time job will benefit from flexible hours. The problem is that there is nothing to stop companies using them more, such as in jobs where the majority of the staff have responsibilities and bills to pay. The Shadow Business Secretary, Chuka Umunna, commented that "for most working people they [zero-hour contracts] mean insecurity for them and their families and leave them subject to the whim and demands of their employer to work at short notice, so the flexibility is not a two-way street".[7] The fact that this is entirely legal almost seems like a loophole in the law, and one which employers are rapidly making use of.


People under such employment terms are classed as being employed for the purpose of national statistics and therefore the rate of unemployment is masked. Could this be why ministers have been so slow to react? Zero-hour contracts have been in popular use for around ten years but only in recent months have proposals for change been made. From June 2013 Business Secretary Vince Cable lead a review of zero-hour contracts for the government and in September proposed restrictions on certain uses, such as when the employee is not permitted to simultaneously work elsewhere (so called "exclusivity clauses"), or when the employee is actually working regular hours. This welcome proposal was in light of the UK's embarrassingly low placing in the G20 pay league, and was followed by a consultation on such contracts by the government which began late last year and will run until March 2014.


As a nation we are becoming ever more accepting of being treated poorly by our employer. The "that's capitalism though" justification is given so often, but do we really mean it? It is currently unlikely that zero-hour contracts will face an outright ban, but action is finally being taken. However, it may not be enough only to target certain uses of them - such as "exclusivity clauses" - which, so far, seem to have been the main point of controversy. The main issue, which requires to be promptly dealt with, is the exploitation and corruption that these contracts allow. It is never necessary to have an entire staff on a zero-hour contract, but doing so affords more power to the employer. Hopefully the consultation will begin a new path, not only towards better employment and financial security, but also towards a new frame of mind that being treated poorly by an employer is not acceptable. The rights of employees should never be sacrificed in order to profit the business.

[1] Chartered Institute of Personnel Development Research Report, ‘Zero-hours contracts: myth and reality’, November 2013, at p.4,,  last accessed on 14.01.14 at 18.00.

[2] Ibid., 4.

[3] Unite website, ‘Government must act to halt rise in zero hours’, 1 August 2013,, last accessed 13.01.14 at 14:00.

[4] Hardy. Ruth, The Guardian [online], ‘It's not zero-hours contracts that are the problem, it's the bosses who abuse them’, 19 December 2013,, last accessed 13.01.14 at 14:00.

[5] Chartered Institute of Personnel Development Research Report, ‘Zero-hours contracts: myth and reality’, November 2013, p.4,,  last accessed on 14.01.14 at 18.00.

[6] Pennycook. Matthew, Cory. Giselle, & Alakeson. Vidhya, Resolution Foundation, ‘A matter of time, the rise of zero-hours contracts’, June 2013, at p.10,, last accessed 14.01.14 at 19:00.

[7] House of Commons Debate, 16 October 2013, cc745-746,, last accessed on 14.01.2014 at 18:00.  

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