Financial Times Flawed Swipe At Ed Miliband’s “Flawed Swipe” At Zero-Hours Contract
A couple of day ago, the Financial Times published an editorial titled , “Ed Miliband’s “Flawed Swipe” At Zero-Hours Contracts” which analysed the Labour Party’s leaders proposed reform to regulate zero hour contracts (see below for link).
http://www.ft.com/cms/s/0/6025a3a4-d864-11e4-8a68-00144feab7de.html#axzz3WLGW8Yht
For those that don’t know, zero hour contract is an employment contract that allows employers to hire staff with no guarantee of work. In short, employees only work when they are needed and at short notice.
In response to the editorial, I have written a re-joinder which is detailed below.
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The Editor
Financial Times 1 Southwark Bridge London SE1 9HL
Dear Sir,
Financial Times Flawed Swipe At Ed Miliband’s “Flawed Swipe” At Zero-Hours Contracts
I have read with interest the FT’s editorial titled “Ed Miliband’s Flawed Swipe At Zero-Hours Contracts” which was published in the 02 April 2015 edition of the Financial Times. In the editorial, the FT argues that Ed Miliband’s attempt to regulate zero hour contract work will not succeed. To support your conclusion, you examine a number of flaws in Ed Miliband’s proposed reform.
I agree with your argument that there is bound to be practical difficulties in implementing Mr. Miliband’s reform as some firms may deploy various measures to escape the proposed rules. I also agree that a number of staff who are under zero hour contracts may be reluctant to enforce their rights in a court of law. I also agree that the flexibility in the employment market in recent years has done little to improve productivity in Britain. However, your attempt to identify the flaws in Mr. Miliband’s argument is also flawed on a number of grounds, which I will discuss in the next few paragraphs.
First, you address the issue of zero hours contract from a top-down perspective without thoroughly analysing the bottom up perspective. A higher synthesis can be obtained when the viewpoints of both the employers and zero hour contractors are factored in the analysis. While as you note, “Greater peace of mind for the boss comes at the expense of job security,” I believe that greater peace of mind for the beleaguered worker should come from not having to work under exploitative conditions.
You claim that Miliband’s proposal is an attempt to position the Labour party on the side of workers by “taking up arms for cleaners and shop staff unsure of their next pay packet;” however, you provide no basis for arriving at such a conclusion. Even if he chooses to side with the masses, is there anything wrong with that position? Ever since the commencement of the financial crisis, the interest of the vulnerable and the voices of the marginalised have long been ignored in the political dialogue. The political class has been “captured” by the elites and in some cases this has been at the expense of the masses. We read of the political class taking European regulators to court to protect the City; we read about auctions being granted to influential politicians in other countries to play tennis matches with the high and mighty of British politics; we read about ministers wining and dining with wealthy businessmen and hedge fund bosses behind closed doors. If some politicians opt to align themselves with the top, it is only fair that some politicians should pitch their tent with the “least of these”.
Second, your statement, “The state cannot legislate against employers simply refusing to hire staff on anything but the company’s terms,” is flawed because it assumes that the company’s terms is always right. An important duty of the State is to protect its citizens and step in when an individual’s or corporate activity violates the rights of others. When a company breaches an individual’s right, it is critical that there are legislations in place to address the firm’s violation. The history book tells us that there was a time when working seven days a week was allowed on company’s terms, yet the State legislated against it; there was a time when children worked 70 hours a week on company’s terms, yet the State legislated against it; there was a time when discrimination based on race, colour, religion and gender were allowed on company’s terms, yet the State legislated against it. So the State can and should legislate against employers that violate others human rights even if these violations are on company terms.
Third, your arguments that:
a) Far too little is known about zero hour work
b) “Just” 2% of all staff work on zero hour contract terms and
c) Zero hour terms are beneficial to students and retirees
are not sufficient and necessary conditions to conclude that regulating zero hour contracts are not required. Referring to 2% of staff on zero hour contracts as “Just” trivialises the human stories behind those living under such conditions. Behind the 2% are tragic stories such as Pamela a care worker who said, “It is so stressful. I have to work 50 hours-a-week so I can afford to live — not in luxury, just the bare essentials. And I have no idea whether or not I’m going to get that.” Furthermore, while zero hours may benefit some students and retirees as you have pointed out, it is wrong to assume, “Zero-hours contracts ease the path to much work that is beneficial to all concerned,” because students and retirees are a subset of the total population working under zero hour contract terms. Those on zero hour contracts also include people with mortgages who need the certainty of income to meet their interest and capital repayment commitments. Your editorial also ignores those who cannot make alternative arrangements for childcare, vacation, medical appointments etc due to the uncertainty of the working hours.
Fourth, your editorial is based on the economics of zero hour contracts, without giving consideration to the morality of zero hour contracts. Economics and morality should not be treated as mutually exclusive categories. Economics without morality is vicious, bloodthirsty and eventually results in disaster as we have learnt from the recent financial crisis. When you say, “There is nothing inherently unfair about a zero-hours contract,” you appear to be focusing on the economic ends while ignoring the immoral means of exploitative working conditions. Zero hour contracts might be good for a company’s bottom line as it enables it to reduce its cost base. Zero hour contracts might provide firms with the flexibility to adapt to changing economic conditions. However, when one sees workers who are underpaid relative to fixed contractors; when one sees employees who are left with no choice but to work under conditions where their working hours are not guaranteed; when one sees employers reap the benefits of having de-facto full time employees without committing to any responsibility, then one will understand why it is wrong to use the immoral means of zero hour contract exploitation to achieve a “moral” economic end of profitability and flexibility.
There is something morally wrong when a single company employs tens of thousand zero contract employees with no guaranteed hours while its directors are awarded share options worth millions of Pounds. There is also something immoral when the British worker who you say deserves credit for “reacting to the slowdown by accepting less pay and hours” shoulder the consequences for a financial crisis they did not cause, while the perpetrators of the crisis pocket millions of pounds in bonuses.
In conclusion, Miliband’s intervention has resulted in analysts in the media houses, investment banks and other consulting and statistical houses expressing their opinion on the reality or unreality of zero hour contracts. It is easy for journalists, economists, statisticians and other analysts sitting in the comfort of their well furnished office to argue that the lack of data on zero hours suggests that Miliband is shadow boxing with figures, but for the thousands of contractors working under such zero hours exploitative conditions, it is a marathon boxing match with only one loser i.e. the worker.
Yours faithfully,
Ahmed Olayinka Sule, CFA
April 2015
