The changes at Sports Direct aren’t enough – government must act on zero-hours contracts

We must not rely on companies receiving poor publicity to change employment policy


A year since the release of my report Zero Sum Game, you don’t have to look far to see that the use of zero-hours contracts is still a huge issue in London’s economy.

At a time when we are facing economic insecurity, exacerbated by uncertainty around the impact of Brexit, working conditions and employment rights are under question. Now more than ever, it is imperative that we protect against the exploitation and instability many workers continue to face with zero-hours contracts.

The race to the bottom for workers’ rights is not a new phenomenon. Recently, Sports Direct was exposed for not paying staff the National Minimum Wage and was directed to issue backdated payments to those affected.

Notorious for employing the majority of their staff on zero-hours contacts and disgracefully transferring women returning from maternity leave onto contracts with no guaranteed hours, they have now announced retail staff will be guaranteed 12 hours a week.

Yet agency workers in the warehouse, whose conditions have been likened to a Victorian workhouse, are excluded from this small step towards job security. This does not go far enough and they are not alone in this poor practice.

The lack of guaranteed hours is not the only problem, the increasing casualisation of London’s labour market is leading to growing instability for workers in flexible employment.

Take Deliveroo as an example, the increasingly popular service that enables you to enjoy meals from restaurants such as Wagamama, Nandos and Pizza Express in the comfort of your own home. Deliveroo cyclists were recently forced to take action over new contracts which would reduce their hourly rate of £7, plus £1 delivery, to just £3.75 for each delivery– well below the London Living Wage.

With the threat of job losses should they refuse the new deal, Deliveroo cyclists staged a public protest and were successful in forcing their employers to back down. But this scenario paints a telling picture about the instability workers today are being subjected to.

Estimates released by the Office for National Statistics (ONS) last week show that 95,000 Londoners are contracted to work for a company, yet are not promised a minimum number of hours.  

This level of flexibility works for some, for example students, but for many the contracts symbolise insecurity, exploitation and a constant worry about whether you can afford your rent or weekly food bill. Many on zero-hours contracts earn below the London Living Wage and many want more hours than they are offered.

The instability caused by a lack of guaranteed hours can deter private landlords from accepting such workers as tenants, can cause difficulties in budgeting and can make it difficult for families to arrange childcare due to the unpredictable hours.

Those on zero hours who rely on extra help from the state to see them through face an additional hurdle because one of the conditions of receiving Universal Credit is that if you work under 35 hours per week, you are expected to look for more hours or take on extra jobs.

This demonstrates the Government’s complete lack of understanding about the link between low-pay insecure jobs and poverty.

Britain can learn the lessons of our international counterparts. In March this year, New Zealand took the plunge and outlawed the contracts meaning that employees now have a guaranteed number of hours per week. Closer to home, a number of EU countries, such as France, have either restricted the use of zero-hours contracts or, like Germany, have heavily regulated them.

Zero Sum Game recommended that reform is needed for zero-hour contracts whilst allowing those workers who like the flexibility offered by zero-hours contracts to maintain it. Such reforms included providing workers with more predictable working hours so that those on zero-hours contracts can expect to know how many hours they will be working each week and what their income will be.

The rights of workers, including paying the London Living Wage, should be enforced and barriers to justice should be removed to prevent employers from exploiting those on zero-hours contracts. It’s also incumbent on government and the Mayor of London to use their influence as an employer and commissioner of services to promote and secure good employment practice – something that Sadiq Khan has promised to act on.

In any future reforms, we need to ensure that we do not just move people onto contracts that only guarantee a small number of hours a week – like you see in the retail sector. Such a move would do nothing to alleviate the instability that zero-hours contracts causes.

The erosion of employment rights and increasing casualisation of workers’ rights is not going to improve by itself. In her first speech as Prime Minister, Theresa May addressed insecure workers when she said ‘you have a job, but you don’t always have job secuity.’ We are yet to see what she will do about this.

Her appointment of George Freeman MP to Chair of the Prime Minister’s Policy Board, does not instill confidence given he once argued in favour of cutting employment rights and wages in poorer areas. And it shouldn’t be forgotten that the PM was an advocate for the repeal of the Equalities Act, which includes vital workplace protections such as equal pay for men and women.

Sports Direct and Deliveroo are finally taking slow steps in the right direction. But the changes don’t go far enough and we must not rely on companies receiving poor publicity to change employment policy.

May must live up to the rhetoric of that first speech and take action now to provide the income stability desperately needed by those on zero-hour contracts.

Fiona Twycross AM is Labour’s Economic Spokesperson on the London Assembly and a Londonwide Assembly Member.

2 Responses to “The changes at Sports Direct aren’t enough – government must act on zero-hours contracts”

  1. mICHAEL

    How is a man supposed to spend his money, when he does not know whether he will have a wage next week?

  2. Unite welcomes Sports Direct's independent review | Left Foot Forward

    […] See also: The changes at Sports Direct aren’t enough – government must act on zero-hours contracts […]

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