OPINION: Employers, just say ‘no’ to zero-hour contracts

My PR sense tells me that zero-hour and short-term contracts, and other new techniques to limit staff costs, are the grounds for a looming social and political battle that businesses will lose.  

We will lose because these techniques will be seen by too many New Zealanders as unfair. They place too much of the risks and costs of employment, and running a business, on the shoulders of workers. The public mood will give left-wing politicians the opportunity to swing the labour relations pendulum back to the bad old days.

The loss will be three decades of benefits accrued from a benign labour relations environment. Three decades where workers and management didn’t battle, but got on with production. Three decades where the worst we endured were exasperating but petty personal grievance claims.

These days labour issues that hit the headlines are about undesired hugs and small gender pay gaps.  But only 15 years before I was born, the headlines were far more serious. In 1951 workers had fought police on the streets to secure higher wages. Over the preceding decades workers had struggled for employment certainty, safe workplaces, sick days, and holidays. In 1913, our society was virtually in a civil war, if not a physical class war, as workers battled with farmers enlisted as special constables.

By those historic standards, and because of those battles, modern day labour issues are largely inconsequential. Regardless of the media furore, the Roger Sutton affair illustrated the extent to which labour relations is no longer a substantive matter in the life of this nation. Our politicised elite agitate over morality-related conduct in the workplace – usually among their well-heeled professional pals. The awkwardness encountered by ordinary young women working in SMEs barely rates a mention. If you think a leery, touchy boss is the worst it can get, try not knowing whether you’ll be re-employed this season. Try waiting for the call to come into work that evening for a few precious low-paid hours.

The trouble is that this is exactly what some businesses seem to have in mind with the new suite of employment practices.

Zero-hour contracts remove the opportunity for permanent employment with reliable income not just for casual young workers, but older people, many with families.  The contracts suit the customer-centric service industry, especially in minimising staff costs. But they achieve that by placing the costs with semi-skilled labour who lack options and power.

Salary penalties for losses incurred while you are at work (like breakages or customers taking off without paying) place the costs and risks of business with staff, not the owner of the capital. That strikes many as unfair because the business owner (and management) is shifting an inherent risk of the business on to staff who are unable to prevent the risk or share profit. It’s not surprising that these staff are usually lower-paid and, these days, non-unionised. 

If the conditions were only harming the working class, the matter might not surface. But these techniques are affecting the children of the middle class – who staff our service industry. Stories about unfair conditions are being told over BBQs and at dinner parties. When middle class voters get upset, politicians take notice.

Labour’s private members’ bill to ban zero-hour contracts could go before Parliament this year, but it is simply political theatre. It won’t succeed. But if the techniques spread and fester over the next few years, we can expect savage new labour laws from the next left wing government (and there will be one at some point).  The risk is that these laws will be a major over-reaction from a left wing political class keen to establish working-class credentials. There could be a return to government interference in labour relations that we have not seen since before the Employment Contracts Act. 

Businesses will feel the effect of this controversy in other ways. More of the public will believe the worst of businesses and will feel a stronger sense of entitlement as customers. 

After a wrenching history of labour relations our society has achieved a relative calm. Business benefits from that consensus because employment matters are trivial, and the public is generally contented as staff and as customers. If business takes too much advantage of this situation, it will drive our society into the ill-will and time-consuming battles of the past.

Mark Blackham is an owner and director of BlacklandPR. For more than 25 years he has provided government relations and PR advice to many of the nation’s major businesses.