The high-profile controversy over zero-hours contracts poses both dangers and opportunities for staffing companies and the concept of a flexible workforce, the director of policy & professional services at the Recruitment & Employment Confederation (REC) has said.

At the same time, recruiters have said they are confident that the government will not take any action that would damage the viability of the UK’s flexible workforce.

Zero-hours contracts – under which workers are not guaranteed any hours, and sometimes miss out on benefits such as holiday pay – came under fire after a series of big-name employers were identified as using the contracts. Among these were Amazon, Buckingham Palace, McDonalds and Sports Direct, the last of which faced the prospect of legal action from one such worker as Recruiter went to press. 

Recruiter Randstad, which has supplied workers to Amazon, has also found itself under fire when it was claimed that staff were told not to tell temporary workers on zero-hours contracts about their right to holiday pay. 

The REC’s Tom Hadley told Recruiter that a danger of the furore was “it opened the debate around atypical work, and the perception that anyone not in a full-time employment capacity is being downtrodden and exploited”. 

This could lead to wider questioning of the recruitment agency model and that “any sort of flexible staffing is intrinsically bad,” he suggested.  

However, Hadley said he had been encouraged by feedback from some trade unions and Labour Party officials which indicated that they understood the need for a flexible workforce.

He predicted that the issue of zero-hours contracts would “continue to rumble on as a political issue”, with the Labour Party likely to consider different models of flexible working (see box below).

However, despite zero-hours contracts becoming a hot potato, Hadley said he also saw it as an opportunity for recruiters. “Now is not a bad time for recruiters to have a conversation with clients about the best ways to introduce flexible working,” he said.

Jeanette Barrowcliffe, finance director at multi-sector recruiter Meridian Business Support, told Recruiter that given the parallels between zero-hours contracts and the typical temporary worker agency model, she was perplexed by the brouhaha. “I don’t understand why there is such a fuss. The entire temporary worker model is based on zero hours,” she said.

She pointed out that in effect “anyone saying that zero-hours contracts are wrong is also saying that the whole temporary agency model is wrong.”

No mutuality of obligation means the agency does not have to offer work and the agency worker doesn’t have to accept it.

Noting that the UK’s flexible workforce was a contributor to “keeping the country going during the recession”, Barrowcliffe expressed confidence in business secretary Vince Cable for being “fairly balanced” on the concept of flexible work.

Andy Hogarth, chief executive officer of outsourcing and recruitment firm Staffline, told Recruiter there was little crossover from the controversy over zero-hours contracts to agencies. He said he was confident that the government “isn’t going to do anything that takes away the UK’s labour market flexibility”.

However, Hogarth suggested that the Chartered Institute for Personnel and Development’s ’s 1m figure of workers on such contracts was an underestimate, pointing to the construction sector where he said such contracts are rife. 

Matthew Brown, managing director at umbrella firm giant group, told Recruiter that the government was forced to look at zero-hours contracts because it had become a political issue. However, he did not see foresee “any dramatic changes to the legislative landscape”, although he said he expected the government to try to ensure that workers received their statutory rights – for example, holiday pay. 

Lizzie Crowley, senior researcher at the Work Foundation, told Recruiter that even if the number of workers on zero-hours contracts was as high as the CIPD’s 1m estimate, this still represented “a small part of the workforce”. She said that while there was unlikely to be “a gigantic increase” in this number, efforts to improve procurement procedures in the NHS, in universities and in local government through outsourcing were driving their use.   

The Agency Workers Regulations (AWR), which increased the cost of using temporary agency workers could also have been a factor in increasing their popularity. However, Crowley pointed out that, until more research is carried out, no one would know the true picture.

The government’s response

• A spokesperson at the Department for Business, Innovation and Skills said there were no plans to involve agencies, or bodies representing agencies, in the department’s evidence-gathering on the extent and nature of zero-hours contracts announced in June by business secretary Vince Cable. The report is due to be completed in September.

• While ruling out a complete ban, Cable has suggested in recent weeks that the government might legislate to prevent employers from requiring workers on zero-hours contracts to work for them exclusively, unless hours were guaranteed.

• Shadow business secretary Chuka Umunna outlined the Labour Party’s position that zero-hours contracts “should be the exception, not the rule”. He has announced a summit on the subject in September. 

Colin Cottell