CIPD responds to Sports Direct Select Committee hearing

9 Jun 2016 09:57 AM

Ben Willmott, Head of Public Policy at the CIPD, the professional body for HR and people development commented on the Sports Direct Select Committee hearing

'The working practices that have been raised are very concerning. The CIPD absolutely condemns any illegal employment practices, and will of course back appropriate penalties for any organisation committing such offences. However, today’s testimony also highlights the need for organisations to do much more than simply follow the word of the law in order to create good, sustainable workplaces that value people and safeguard their physical, mental and financial wellbeing.'

On zero-hours contracts specifically, Willmott comments:

'This investigation will once again thrust zero-hours contracts under the spotlight, but the issue is not black and white. Evidence shows that used responsibly, and for the right reasons, zero-hours contracts can provide flexibility that works for both employers and individuals. Our research last year found that zero-hours contract employees are, on average, as satisfied with their jobs, more satisfied with their work-life balance, and less likely to feel under excessive pressure every day, as employees as a whole.'

'However, zero-hours contracts are not always suitable for either organisations or workers and used in the wrong way can lead to people feeling exploited. There is clear evidence, both in our research and from the news today, that poor practice does exist. The answer is not to ban zero-hours contracts, but rather to seek to eliminate bad practice through the development of a code of practice for employers and a campaign to create greater awareness among workers of their employment rights. Banning zero-hours contracts would simply mean the use of more temporary workers and short-hours contracts, neither of which provide more in the way of economic or job security for workers.'

'In addition, simply demonising zero-hours contracts risks failing to address the wider causes of low-paid, low-quality work which exists in the UK because of poor management and not because of a particular type of employment contract.'

'We also believe there should be a national campaign to raise understanding and awareness among both employers and zero-hours workers on the issue of employment status and rights, and all workers should be legally entitled to a written copy of their terms and conditions not later than two months into employment.'

In its reports Zero-hours contracts: myth and reality and Zero-hours and short-hours contracts in the UK: employer and employee perspectives, the CIPD has recommended the following areas for employer improvement in working practices:

• Employers should only use zero-hours contracts where the flexibility inherent in these types of arrangement suits both the organisation and the individual.
• Employers should consider whether zero-hours working is appropriate for their business and if there are alternative means of providing flexibility for the organisation, for example, through the use of annualised hours or other flexible working options. Zero-hours working lends itself to situations where the workload is irregular, there is not a constant need for staff or staff needs are driven by external factors outside the employer’s control.
• All zero-hours contract workers should receive a written copy of their terms and conditions. We have called for all workers to be entitled to a written terms and conditions statement no later than two months into their contract. Currently, under the Employment Rights Act 1996, only employees are entitled to this.
• Employers should set out in the contract the employment status of those engaged on zero-hours contracts and conduct regular reviews (at least once a year) of how these contracts are operating in practice. Reviews should include conversations with line managers and staff on zero-hours contracts. If the reality of the employment relationship no longer matches the contract of employment, one or the other should be adjusted to bring them into line.
• Employers need to provide training and guidance for line managers to ensure they are managing zero-hours workers in line with their employment status. Training must ensure that line managers are aware that zero-hours workers have a legal right to work for other employers when there is no work available from their primary employer.
• Employers should provide zero-hours workers with reasonable compensation if pre-arranged work is cancelled with little or no notice. We believe a reasonable minimum would be to reimburse any travel expenses incurred and provide at least an hour’s pay as compensation. Some employers appear to go further than this, for example by paying employees in full for shifts cancelled at short notice. This seems a reasonable position if organisations also prevent or penalise employees from cancelling pre-arranged work at short notice.
• Employers should ensure there are comparable rates of pay for people doing the same job regardless of differences in their employment status. This could be written into employment policies and terms and conditions with practice reviewed periodically

Related information:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/news-parliament-2015/sports-direct-working-practices-mike-ashley-no-show-16-17/