Cable announces zero-hour contracts review – but will it go far enough?

14 June 2013

Business Secretary Vince Cable has launched a review into zero-hour contracts, but unions may be disappointed by its outcome, particularly as the Conservative Party are likely to make it difficult to make dramatic changes to the law around the deals.

Zero-hour contracts do not provide employees with a minimum amount of work per week and effectively keep them on standby without any guarantee of regular payment. Figures from the Office for National Statistics have shown a rise in the number of workers employed on such terms, including in the NHS.

“There has been anecdotal evidence of abuse by certain employers – including in the public sector – of some vulnerable workers at the margins of the labour market,” the Cable told the Independent.

Indeed, the IER recently highlighted that the contracts can be applied in such a way that workers find it impossible to take on additional employment, and are completely reliant on unpredictable calls to work, which on some weeks may never come.

While unions have applauded the launch of Cable’s review, there is uncertainty over how far he will really go to protect vulnerable workers from having to depend on zero-hour contracts for their main source of income. There have been calls for the deals to be outlawed, but the Conservatives will not accept an outright ban, and Cable told the Independent that he would not consider one either. Meanwhile, there is also reason to doubt the ability of the review to make true changes in the current administration.

The Independent suggested that Cable’s announcement on zero-hour contracts “echoes” the infighting between the Liberal Democrats and the Conservative Party over Adrian Beecroft’s ‘no-fault dismissals’ recommendations. Beecroft, a venture capitalist whose ideas have previously had a significant impact on Tory employment policy, suggested micro-employers should be able to sack their staff for no good reason in return for a cash settlement. Vince Cable blocked the idea, but not for long. The Coalition’s Shares for Rights scheme essentially provides employers with the same rights as no-fault dismissal, but this time it is open to businesses of all sizes. Whether brought into line by Tory whips or simply uncommitted to employment rights, the Lib Dems failed to make any such fuss over the new law.

Even if Cable is successful in reforming the use of zero-hour contracts to better protect workers, how long will it be before the Tories come forth with a ‘new’ policy idea that is really zero-hour contracts under another name?