Such contracts might work well for students but greater and sensible regulation is still needed, says Ken Mann

Data from the Chartered Institute of Personnel and Development (CIPD) prompts me to take another look at the case for and against controversial zero-hours contracts.

In the context of Living Wage legislation, which becomes law in April, there is reason to be nervous for the future prospects of those the Institute insists enjoy the limited plus points.

CIPD conducts its own Labour Market and Employee Outlook surveys across the UK. Combining the two reveals some interesting responses from those with direct working experience of this breed of engagement, which effectively defines teams as "workers" rather than "employees".

It is more than a subtlety in terms of rights.

For the time being at least, zero-hours and short-hours contracts look set to become a permanent feature of the overall UK labour market.

CIPD estimates that the number of zero-hours contracts has increased from about
a million in 2013 to about 1.3m late last year.

It further estimates that about 400,000 employees across Britain are on short-hours contracts. These come with a guarantee of up to eight hours’ work a week, though like zero-hours agreements more work may be available to top-up earnings.

It is the "typical" weekly and monthly pay that is the key element for workers on zero-hours agreements but contract status remains a problem.

In the absence of decent remuneration on an assured full-time basis, access is denied to financial instruments that help fuel the economy – like loans, mortgages and long-term home rentals.

A more insidious side exists in that it is an arrangement much more open to abuse and discrimination by unscrupulous employers; much less hope of legal recourse exists.

There is another employer-led view.

Research suggests that sustaining and expanding small and even larger businesses in the important tourism, hospitality and retail sectors – which are affected by seasonal trends and spikes – is more difficult without the flexibility which is offered by such working practices.

Thus, job retention – or should I say "work" retention – might be at risk, according to employer groups.

Around 25 per cent of employers use zero-hours contracts. The CIPD report notes: "While workers on these contracts may be less likely to feel involved at work and see fewer opportunities to develop and improve their skills than employees as a whole, they are also less likely to feel overloaded and under excessive pressure."

I suspect it is also fair to comment that "excessive pressure" in the bigger picture comes in different packages. Like the constant hand to mouth inability to afford the basics and a reluctant but necessary familiarity with the local food bank.

Yet the CIPD appears to stand my theory on its head. "The proportion of zero-hours contract and short-hours contract employees who say they are satisfied or very satisfied with their jobs – 65 per cent and 67 per cent respectively – is slightly higher than the proportion of employees as a whole (63 per cent)," its report contends.

I was somewhat surprised that it goes on to state: "In the CIPD’s view, the available evidence does not provide a strong case for further legislation to regulate the use of zero-hours contracts, and the best way to improve the working lives of the zero-hours contract workforce is to help more employers understand why they need to develop flexible and fair working practices and how to implement them."

CIPD concludes in its report that an outright ban on zero-hours contracts, such as
Ed Miliband proposed in the Labour Party election manifesto, "could do more harm
than good".

There may now be a good deal of consensus on that last remark, in view of the wider advantages of keeping people in some form of gainful employment rather than as unemployed on new era benefits.

By a quick piece of purely empirical deduction, I can nod my head to other CIPD findings that indicate working arrangements such as these are useful for more than a few.

For instance, I can understand how it might work well for a student looking to pay their way through college or
university while at the same time trying to study.

Similarly, those seeking a way of topping-up unsatisfactory private pension plans taken early while balancing other interests, paid work or otherwise, might welcome the option, as the CIPD puts it,
"to turn down work" when it
is offered.

Note that doing that too often is likely to result in fewer offers of hours. I’m still of the view that greater and sensible regulation is needed.

Even if statutory redundancy pay isn’t made standard, time-off for emergencies and a minimum notice period should surely be provided in all contracts. As a "worker", the employer has no specific obligation on even these most basic inclusions.

Moreover, I can see how Living Wage legislation has the potential to adversely influence these jobs.

Those on zero-hours contracts, and to a lesser extent colleagues on short-hours contracts, may be at risk when other employees on more generous traditional arrangements have to be paid the new minimum £7.20 per hour for those aged 25 and over.

There have been warnings that several areas of Scotland could become danger zones for job loss as employers look to compensate for swollen core staff costs.

Amid a fragile economic outlook, what good is flexibility when savage cuts to the hours of these alternative contracts are probably imminent?