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Should purpose-driven organisations ever use zero-hours contracts?
We’ve partnered with our friends at Ramsay Paterson LLP, an employment law firm that specialises in working with values-led organisations, to develop and share insights about what it takes to implement values and culture within purposeful and ethical organisations for HRZone.com. The following is an abridged version of Stephanie Paterson’s recent article in HRZone.
Zero-hours contracts – contracts where the worker is not guaranteed any hours of work - have received a lot of negative attention in the press over the past couple of years. As a result, many value-driven organisations are reluctant to use them. But should ethical and values-driven organisations avoid zero-hour contracts completely?
Many ethical businesses will still need some flexibility in their hiring arrangements, but want to avoid the negative association with zero-hours contracts. In some cases, the alternatives to zero-hours contracts can be even worse.
If you have a genuine need in your organisation for flexible arrangements to meet the ebb and flow of demand, perhaps you need to look again at zero-hours arrangements. Just make sure you ask a few key questions first:
Does my organisation have a genuine business need for flexible working arrangements?
If so, be very clear on what these needs are: discuss and agree this with other managers and keep a record.
How can I best address those needs?
As well as zero-hours contracts, you may consider:
- Offering overtime to permanent staff
- Variable-hours contracts (with some guaranteed hours)
- Recruiting a part-time employee or someone on a fixed term basis.
- Offering an annualised-hours contract if there are fluctuations in demand, but this can be anticipated across the year.
- Using agency staff
Is my organisation being transparent about our flexible working arrangements?
If you do chose a zero-hours or variable-hours arrangement, how you implement it can make all the difference.
- Be very transparent with the individuals concerned so that they’re absolutely clear on what they’re agreeing to and why.
- Make sure individuals understand their rights and explain how any entitlements will be accrued.
- Give as much notice as possible when offering work (and make it clear they can turn it down) and importantly, avoid cancelling work at late notice.
- Consider whether these workers should be given full employment status (not casual workers) despite the variable nature of the hours you can offer.
We’ve come across organisations where zero-hours/variable-hours arrangements are being used in very carefully considered ways. These organisations have thought about the impact of the arrangement for the individual and can genuinely justify its use in a way that accords with their strong values.