Zero-hours contracts: Labour’s zero-sum game

In February, I questioned whether Labour shadow ministers have any idea how to implement their near totemic pledge – set out in their New Deal for Working People – to “ban zero-hours contracts and contracts without a minimum number of guaranteed hours”. And in doing so, I noted that, in a recent Financial Times column pushing back against media reports that Keir Starmer is under pressure to water down the laudably ambitious New Deal document ahead of the approaching General Election, deputy leader Angela Rayner had possibly qualified the pledge by stating that Labour would ban only “exploitative” zero-hours contracts. But how this would be done remained a mystery.

Then, early last week, the eagle-eyed Darren Newman reported that, when delivering her Mais Lecture at the Bayes Business School on 19 March, shadow chancellor Rachel Reeves had not only mirrored Rayner’s apparent qualification of the pledge, but had gone on to explain how this qualified ‘ban’ would be implemented:

We will ban exploitative zero hours contracts, by giving all workers the right to a contract that reflects the number of hours they regularly work, based on a twelve-week reference period.

As Darren noted, “the suggestion here is that the right to a regular contract where regular hours have been worked for 12 weeks [pledged in the New Deal document] is not a separate right in addition to the ban on zero-hours contracts – it is the method by which the ban on ‘exploitative’ zero-hours contracts is to be accomplished”. And, in a subsequent interview on Sky News, Labour Party chair Anneliese Dodds appeared to confirm what would amount to a significant policy shift.

Darren concluded that “Labour needs to think about how to convert slogans into legislation that actually works, [and] perhaps what Rachel Reeves said is part of that process. On the other hand, it might have been a typo.”

Well, we didn’t have to wait long for confirmation that it was not a typo. On Thursday morning, during an extended interview by the BBC R4 Today programme’s Nick Robinson, ahead of Labour’s launch of their campaign for the local elections on 2 May later that day, Angela Rayner was (eventually) very clear:

Nick Robinson (at 2:18:21): You used to say you’d ban all zero-hours contracts. You don’t any more, do you?

Angela Rayner: Well, we will ban zero-hours contracts …

Nick R: But not all of them.

Angela R: Well, there’s different ways you can do it, you can aggregate over 12 weeks, we’re in consultation and we’re working with the sectors including with the workers that says we do not want exploitative contracts where people are working regular hours but are [on] a zero-hours contract.

Nick R: So, people who want to work [on a zero-hours contract] will still be able to work [on a zero-hours contract]. A change of approach?

Angela R: If people are working a flexible contract, their contract will be be able to specify that, but what we won’t have …

Nick R: So, you won’t ban zero-hours contracts?

Angela R: Let me be clear, Nick. What we won’t have is people working regular hours who are given a zero-hours contract and no security. We’re calling time on that and I think most people recognise that.

Nick R: Understood.

Angela R: You can’t get a mortgage, you can’t get credit, if you’ve got a contract that doesn’t give you any hours and it doesn’t work for people.

So, it is now very clear: the incoming Labour government’s Bill to implement the New Deal for Working People will not include a ban on “zero-hours contracts and contracts without a minimum number of guaranteed hours”. It may include the New Deal‘s new right to a regular contract where regular hours have been worked for 12 weeks (one of several recommendations by the Low Pay Commission in a December 2018 report on one-sided flexibility), but that would not amount to a ban on exploitative zero-hours contracts, and would most likely benefit only a very small proportion of the 1.1 million workers currently on a zero-hours contract.

In short, the headline policy is a sham, and always was a sham. All that is actually on the table is a new right to seek a bit more ‘security’, but only for those workers who already have the rather significant security, in this context, of working regular (and therefore predictable) hours over a sustained period. And, realistically, a great many of those workers will be content enough with that working arrangement to not want to exercise the new right. But there is no such protection for those who need it most – the far greater number of workers who are being exploited by being given only irregular and unpredictable hours by a rogue employer.

Furthermore, as Darren Newman noted in his blog of 19 March, there is a very real risk that telling employers that, if they give a worker regular hours for 12 weeks, then they will have to write that into the worker’s contract will create a perverse incentive for such employers to offer only irregular and unpredictable hours. Doh!

Whatever, politics aside, this is no big deal. Not for the first time, Labour in opposition have made policy by slogan, without stopping to think how they might turn the slogan into law once in government. So, there never was going to be a ‘ban on zero-hours contracts’. But, as I have said many, many times over the past decade, ever since people in Labour first started talking about banning zero-hours contracts, the misuse of zero-hours contracts by rogue employers is best seen as a symptom, not the disease – which is the ability of rogue employers to exploit vulnerable workers with near impunity, including by the misuse and abuse of flexible working arrangements. Indeed, as the Low Pay Commission noted in its December 2018 report, “the problems associated with one-sided flexibility go wider than the phenomenon of zero-hours contracts”.

In terms of treating the underlying disease, there are far more important pledges in Labour’s New Deal for Working People than the (never practicable) ‘banning’ of zero-hours contracts, not least the rarely mentioned pledge – which was also in Labour’s 2019 general election manifesto – to “establish and properly fund a single enforcement body to enforce workers’ rights” (see page 11).

As previously noted on this blog, at the 2019 general election the Conservatives (and even the Liberal Democrats) similarly pledged to create such a new enforcement body, but Boris Johnson never found time for his repeatedly promised Employment Bill, and Liz Truss and Rishi Sunak … well, you know that story. We’ll just have to hope that the coming Labour government sticks to its word on that pledge, at least.

About wonkypolicywonk

Wonkypolicywonk is a policy minion, assigned wonky at birth, who was lucky enough to work for two MPs in the House of Commons, and for Maternity Action, Working Families, Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK.
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