Charities adopt the zero-hours contract

Employers that give zero-hours contracts to some of their staff have faced criticism - but many argue that such contracts are not always as bad as they might first appear. Patrick McCurry investigates

Zero-hours contracts
Zero-hours contracts

Zero-hours contracts have been a hot topic in the national media, with opponents claiming they can be a method of cutting wage costs and giving the employer all the power at the expense of the employee.

Under the terms of such contracts, employees work only when they are needed by employers, often at short notice, and are paid only for the hours they work. Opponents argue that this leaves workers with little job security and open to exploitation.

A report by the Chartered Institute for Personnel and Development published in August said that there could be a million people on such contracts in the UK, though only a small proportion (14 per cent) said their employers failed to provide them with enough hours each week. The study said that such contracts were more common in the voluntary sector than in the public and private sectors, with 34 per cent of voluntary sector organisations employing staff on zero-hours contracts, compared with 24 per cent in the public sector and 17 per cent in the private sector.

There is no specific research on why the voluntary sector has a higher proportion of staff on zero-hours deals, but it is likely to be due, in large part, to the high number of social care providers in the sector, where such contracts are common.

Different kinds of contracts

Gerwyn Davies, labour market adviser at the CIPD, says it is important to realise that there are different kinds of zero-hours contracts. If you are classified as a "worker" in such contracts you will not have statutory rights to sick pay, pension and holidays. But if you are classified as an "employee" you will.

One difficulty, he says, is that an employee might be confused about what kind of contract they are on and what their rights are. "These contracts can be complex and, whereas the employer has lawyers and HR departments to guide them, the employee does not," he says.

Davies says such contracts have become more common because of the move towards a more flexible labour force, continuing pressure on costs and fluctuations in demand in some sectors.

Debra, a national charity that works with people who have a skin-blistering condition, employs four people in its shops on zero-hours contracts. Louise Westphalen, head of PR at the charity, says: "The benefit for us is that if one of our shops team is absent unexpectedly we can call in someone on a zero-hours contract - and that can mean the difference between a shop staying open or shutting."

She says that the benefits of flexibility work both ways because there are employees who might not be able to commit to a regular number of hours but want to work on a less predictable schedule.

Employment rights

At Debra, the zero-hours staff are classified as employees, which means they are still entitled to the usual employment rights. Zero-hours employees at the charity usually work between two and 13 hours a week.

Nevertheless, there are concerns in some quarters about the use of such contracts. Joe Irvin, the chief executive of Navca, the local infrastructure support body, says he is worried about the kind of contracts that give employers all the power.

"There are people who want the flexibility, who are freelance," he says. "But what we're against is the kind of contract that means someone has to wait at home not knowing if they will get any work."

Irvin says he would be concerned if commissioners of services in areas such as social care were putting undue financial pressure on voluntary organisations that led to them installing zero-hours contracts.

He says: "I have relations who use home helps and care assistants, and I'd like to think that those people are working with decent employment conditions. Otherwise you get a high staff turnover, which is not good for the service user."

In some cases, however, zero-hours contracts might represent an improvement on other practices. Rachel Perowne, HR director at the health and social care charity Turning Point, says it recently consulted its front-line staff, who are casual workers, about moving them onto zero-hours contracts. The change would affect about 12 per cent of the charity's near-3,000 staff.

There were no objections to the proposal from staff, she says, and it means these casual workers will now have employment rights such as sick pay and holidays. In this case, says Perowne, zero-hours contracts give the charity the flexibility to plug gaps in care at short notice while giving staff more rights than they previously had.

Howie Watkins, secretary at Orinoco, a small Oxfordshire-based arts charity, agrees that staff might prefer zero-hours contracts to more casual contracts. Orinoco has an annual turnover of £30,000 and promotes re-use, art and creative play through education and direct action.

Watkins says: "When cash is limited and work is occasional, zero-hours contracts are better than forcing people to be freelance.

"We use outreach workers on zero-hours contracts because they have more rights than if they were freelance. They also have less admin to contend with, such as invoicing and tax."

According to Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, zero-hours contracts are not a problem in themselves, but how they are administered might be. He says: "The most important thing between employers and employees is often the quality of their relationship, rather than the wording of their contract."

But he says that the NCVO would support measures to mitigate some of the practices that have a particularly negative impact on sector employees.


CASE STUDY - THE HALOW PROJECT

The Surrey-based Halow Project provides support for about 200 young people who have learning disabilities. Care services are provided by about 45 'buddies', who are mostly young people, often students, on zero-hours contracts.

Halow ProjectSam Hart, the buddy service coordinator, says she has seen zero-hours contracts from both sides because before she joined the Halow Project she had worked on zero-hours contracts for about 10 years at another care charity.

She says that zero-hours contracts provide flexibility to both the charity and the buddies. Many of the buddies are students, so a zero-hours contract allows them to pick and choose when they work and manage their studies at the same time.

They also help the charity to respond flexibly to the needs of its service users, says Hart. But she adds that the contracts do not always work in the charity's favour, and there are times when buddies are not always available when needed.

For example, service users would frequently like the buddies to work at weekends, she says, but the buddies often prefer not to.

Hart acknowledges that some of the buddies would like more stability, such as having a guaranteed minimum number of hours in their contracts, and says the charity is considering making changes in some cases.

But she says the implications of the zero-hours contract are explained clearly at the interview stage and some candidates who are looking for more stable employment withdraw from the process at this stage.

"But for many young people who are studying or haven't decided what career they want, a zero-hours contract suits their lifestyle very well," says Hart.

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