Zero hours contracts, employment and small businesses

In the wake of Sports Direct ditching zero hours contracts, we look at what using zero hours contracts means for companies.

The continued widespread use of zero hours contracts will be a key challenge in the prime minister’s action against job insecurity, a concern cited in her maiden speech, according to the Resolution Foundation.

New analysis from the Foundation shows that two in three (70 per cent) of zero hours contract workers aged over 25 have been on one for more than a year, indicating that their use stretches well beyond those seeking short-term flexible work.

James Peck, UK managing director of Jobandtalent says that, managed correctly and fairly, flexible working options, whether it’s zero hours contracts, on-demand business models or general shift work, can empower both employees and small businesses and create a satisfied, efficient workforce.

‘Today’s workforce values jobs that fit around their lives, whether that’s a parent working around childcare, a student supporting living costs with a part-time job, or even a full-time worker freelancing on the side to pursue a particular passion.’

But he adds that, in the wrong hands, zero hours contracts can be exploitative to workers. ‘After much deliberation, new legislation has been put into place, but given the complex nature of the subject, it’s little wonder many SMEs are still left perplexed.’

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Peck says that 68 per cent of companies questioned by Jobandtalent revealed they are unclear on the regulations surrounding zero hours contracts and how they are affected.

‘Most SMEs understand that they have an obligation as employers to protect their staff and comply with legislation. When they fail to do so, this often comes from confusion over what this entails, or lack of support, rather than actual negligence,’ he adds.

However, unfortunately the fines and consequences are the same regardless of the cause. ‘The key is for SMEs to uncover how and where they seek support on matters of staff management, so they are freed up to concentrate on the core aspects of running their business, without leaving themselves vulnerable to regulatory breaches.’

In support of scrapping zero hours contracts

Jacques de la Bouillerie, managing director of Coople, says that Sports Direct’s recent move to scrap zero-hour contracts is one that has been met with resounding approval. ‘We note with interest that such a large organisation is moving away from these contracts which do not provide the same choice and flexibility for the employee as they do for the employer,’ he says.

‘Many retail brands have a need to recruit in line with peaks of consumer demand on the high street, and are seeking new ways to recruit that support the employer as well as the employee.’

See also: The Small Business guide to HR

De la Bouillerie adds that, with the improvements in technology, the hiring process can now be digitised; companies can now hire skilled people within minutes, with no admin or paperwork, to keep up with their demands.

‘As a result, the concept of zero hours contracts is becoming redundant and an even playing field between employer and employee can be established.’

Sports Direct’s decision to remove the zero hours staffing model speaks of a changing attitude, one which many hope will mark a wider shift in policy that supports individuals looking for part-time to create their ideal work/life balance.

In the modern fast-paced work world, companies should recognise that their policies around flexible working hours should reflect their staffs’ needs.

Further reading on zero hours contracts

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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