Zero hour contract

Zero-hour contract

The zero-contract is classified as a casual work contract but in which no minimal work hours are specified. Moreover, the employee can be called at any time to work, there is no such things as planned timetables, so the employee is unable to make a week schedule. The number of zero-hour contract has drastically increased since the 2008 stock market crash which caused a global crisis into the economies of developed countries.  

Today 910 thousand of workers in the UK have a zero-hour contract, a four-fold increase from 2000 (some sources even talk about 1.8 million zero-hour contracts in the UK)

In this report, I will make a detailed presentation of this type of contract to see if it is suitable in France and if it is should be used on a larger scale.

I will firstly introduce the subject by presenting its history, in the second place I will present you the functioning of this type of contract and lastly, I will make a comparison between France and England to identify the advantages and drawbacks.  

I – History

It’s common to say that the zero-hour contract was created in England in the 2000s and use massively after the 2008 crisis. In fact, this type of labor contract exists since the industrial revolution during late 19th century.

People working in docks were in charge of loading and unloading goods from boats. Back when cranes were not as efficient as they are now, harbors in Great Britain like worldwide needed intensive labor. This caused a massive arrival of poor workers on the docks.

However, harbors could not offer full time contracts, and they started to develop a system of tickets. Only workers with tickets could enter the docks and start working for variable length. These people could work from an hour or a day.

Of course, this unequal number of hour worked caused employees to receive low salaries and therefore the social climate was in the worst and this lead to the great strike of 1889 where unions became stronger and decided to fight against the employers.

This example is strongly related to our topic, with the recent strikes that occurred in England against McDonalds. On September McDonald’s restaurant in Cambridge and Crayford, south-east London, went on strike for the first time since 1974, the date when McDonalds opened their first restaurant in United Kingdom. It seems that the events that occurred during the industrial revolution are happening again today.

This time most zero-hour contracts are coming from fast food restaurants such as McDonald’s, Subway, Dominos Pizza. In these restaurants the turnover is very high because most of the employees have casual work contracts. The high unemployment since 2008 results in huge number of young workers with almost no experience to apply in these fast food chains. Moreover, McDonald is the company that introduced this type of contract in the UK soon after their arrival in 1974.

These restaurants are protected from labor shortage, so they have the possibility to worsen both work conditions and salaries.

Nowadays in Britain it seems that the zero-hour contract is the commonly used form of contract in the fast food industry.

[pic 1]

This graph has been made by the Office of National Statistics, the UK’s largest independent producer of official statistics.

This graph shows us that the number of zero-hour contracts used in UK have slightly increased from the 2000s until 2013 when they almost tripled.

Now the question is why such a drastic increase in 2013 ? As we have seen before, the 2008 stock market crisis is the event that explains the increasingly common use of these contracts.

However, we can see that between 2008 and 2013, their using has only slightly increased. But this is not the case for unemployment in the UK which has drastically increased due to the 2008 global crisis. It reached its highest point in 2011. Since then the unemployment has started to decrease and in 2014 it was below the 6 % (on July 2017 it was at 4.2 %)

We have now figured out why the number of zero-hour contracts has raised that much in 2013, it is because of the high unemployment rate and the mass using of these contracts has helped to reduce the unemployment.

Labor Party leader Jeremy Corbyn has been critical of this situation. On the 8th of June 2016, he asked to prime minister Cameron, what the government is doing to ban the zero-hour contracts like New Zealand did on March that year.

Indeed, the zero-hour contract is the most effective tool to reduce the unemployment since it imposes almost nothing to the employer. Sadly, the work conditions are getting worst and wages are mostly under the minimal hourly wage.  

II – How does it work ?

1. The terms

[pic 2]

Like in France, contracts are divided in several terms. The aim of a work contract is to inform both the employer and the employee about their commitments and rights. The employee can see the amount of hour he is supposed to do per weeks and also his wage and possible perks.

In a zero-hour contracts, we also have several terms except that there is no information about the amount of hour the employee is supposed to do.

• Status of this agreement, the first thing to write is that this contract is not considered as an employment contract; Indeed, the company that hires you under this type of contract has no obligation to provide you work all the time. There is no such things as minimal level of work (“the Company makes no promise or guarantee of a minimum level of work to you and you will work on a flexible, "as required" basis”). Basically, the company has no obligation to give your work at any time but only when the company will need you. When you are not required to work, there is no obligations between both you and your employer.

• Company’s discretion as to work offered, the company does not have to provide any reasons to such decisions. 

• No presumption of continuity, just because the company gave you work several times does not mean that your contract can be redefined as regular work. This basically means that if a company have been given you several missions, they do not have the obligation to employ you with the same planning until the end of the contract.

Also, there shall be no more relationships between the employer and the employee between two assignments.  

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