Recent government announcements to sanction job seekers who refuse zero-hour contracts, have received a mixed response. With recent statistics from the Office for National Statistics revealing that 1.4 million people are on zero hour contracts, which according to the ONS has increased more than threefold since 2010, we take a look at the benefits, drawbacks and alternatives for charities and other not for profit organisations when considering these types of contracts.
The CIPD results showed that 34% of charities compared with 24% of public sector employers and 17% of the private sector employ staff on zero hours contracts.
Why would you use them?
Zero hour contracts are flexible for both employer and employee. For many charities,operating is becoming increasingly unpredictable, due to changes in funding and the way their services operate; such as service users being given their own budget to spend with providers of care. Therefore they don’t have a regular need for staff and these contracts allow them to meet their users’ needs without wasting funds. For employees who don’t need a set number of hours each week, such as students/carers, zero hour contracts give them the flexibility to work when it suits them.
The government have recently been pushing for more flexibility in terms of staff working hours, home working etc, and the charity sector has traditionally offered more flexibility than commercial organisations. Zero hour contracts offer a lot of flexibility for staff and, unless stipulated in the contract,allow employees to work for more than one organisation, enabling them to ensure they still have a regular income.
What are the disadvantages?
On the flipside, many people need stability and regular income, so they can manage their everyday bills and commitments. Employees on zero hour contracts can also miss out on benefits, such as pensions, especially when employers offer a certain percentile of salary towards pension contributions.
People on zero hour contracts may not be fully committed to your organisation if they are working for more than one charity and you may still not have staff available when you need them, as they may be working elsewhere.
It can be difficult to work out holiday pay, holiday accrued, whether the contract still exists between assignments, especially if they work for more than one employer. It is important to therefore ensure their work is tracked by HR and a good relationship is managed between the employee and manager.
Zero hour contracts can prevent continuity of care, especially in health care settings where care workers get to know the people they care for and their health needs. Zero hour contracts could result in a breakdown of communication or a lack of staff to cover.
Not for profit organisations need to consider the negative publicity surrounding zero hour contracts. Only last year, organisations such as Turning Point became the target of news stories. Turning Point did respond to this negative press with a statement; however charities should consider the negative impact on donations and to potential donors compared with the savings they make on these contracts.
Points to consider
Before implementing contracts such as these, organisations should think about their aims and ethos and ensure any contract is consistent with this. Give these contracts to the smallest amount of your overall staffing numbers as possible and regularly review how these are working. Where possible, ensure zero hours staff are receiving the same employment rights as staff with part-time or full-time contracts.
Ensure you both have a copy of the employment contract and if they are managed by a team/line manager, ensure they are aware of their contract and work in-line with their employment status. At all times the contract should be of benefit to you as an employer and to the employee.
Consider other types of staffing contracts, such as annualised hours. This offers the employee a fixed salary where they work more hours when there is a need and less otherwise. If more hours are required in addition to the fixed hours, you could consider paying overtime.
Temporary or contract staff also offer flexibility without commitment. By working closely with an agency such as TPP, you could have a bank of candidates available at short notice who are actively looking for temporary work.For further information on our temporary services please contact us on 020 7198 6000 or email info@tpp.co.uk.
For further information or advice on zero hour contracts, you may find the following websites useful:
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