Zero-hours contracts, bad management and good behaviour

27 November 2013

Zero-hours contracts were around for years before they got on to the political agenda and took a ritual kicking. The truth is that zero-hours contracts don't do people any harm. It is poor managers who do that. And poor managers can employ people on all sorts of contracts.

So says, Susannah Clements, deputy chief executive at the CIPD, in the Guardian, talking about the recent CIPD research.

In one sense I agree. Given the choice, I’d much rather work on a zero-hours contract for a decent company, on a reasonable wage, under a competent manager, than be an employee at an unpleasant company, underpaid, under a hostile fool.

But one of the things that employment law can do is encourage good management and decent employer behaviour.

A good example of this is the Sex Discrimination Act 1975. Since the 1970’s women’s role in the workplace and how they are treated has improved almost beyond recognition. A lot of this had nothing to do with the law – society and gender relations were changing already and continued to change. But the SDA, by making discrimination, unlawful, contributed. In particular, it created a feedback loop. Behaviour changed, in part, because of concern about the law. This created new cultural norms, which in turn altered how the law was applied, which again moved the culture.

The other way the employment law contributes to decent employer behaviour is that it helps protect good employers from bad employers. In the long-run a well motivated, well trained and well treated staff may be a competitive advantage. But in the short run there’s a lot of competitive advantage in paying the lowest possible wage while keeping your staff in line by bullying and intimidation. The wheels may come off in a couple of years, but that’s not much consolation to the decent employer who lost key contracts to an underbidder. Employment law, such as unfair dismissal, the national minimum wage and so on, aims to hold everyone to a basic minimum standard of behaviour.

This is important because, although Ms Clements is right that good management is important and employer guidance is useful, the fact is that there are nasty, unpleasant and even evil employers out there. Guidance doesn’t work on people who don’t care about treating their employees fairly – unless you give the guidance teeth. One way of doing that is by backing it with law.

The difficult bit is getting the right balance. Enough protection for employees, without imposing arduous burdens on employers – which can, as Ms Clements notes can cause problems for employees as well.

This balance is particularly difficult in areas like zero-hours contracts, where there is both good and bad practice. And where a clear legal definition of the bad practice is tricky.

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