Editorial: Guarantee minimum work hours

The publicity generated by employees' eventually successful fight against such contracts at Restaurant Brands, the company that owns KFC, Starbucks, Pizza Hut and Carl's Jr. Photo / Christine Cornege

Opinion

Just as Labour governments are prone to cater to even the more extravagant wishes of trade unionists, so their National counterparts can find it difficult to resist the over-the-top whims of employers. In both cases, the outcome is often lamentable, whether due to unintended consequence or obvious unfairness. Into the latter category fall zero-hour contracts, a product of employment relations law designed to meet employers' craving for maximum workplace flexibility. Now the Government finds itself having to backtrack on such contracts.

As much was confirmed this week by the Workplace Relations and Safety Minister, Michael Woodhouse. Not so long ago, he was far more equivocal, saying a ban on such contracts would be an overreaction. Now, he concedes action is required. Two factors probably explain the Government's change of heart.

The first is the publicity generated by employees' eventually successful fight against such contracts at Restaurant Brands, the company that owns KFC, Starbucks, Pizza Hut and Carl's Jr. This highlighted the imbalance in a situation that requires employees to be available for work but does not guarantee a set number of hours. Workers have no certainty about wages from week to week, and financial planning becomes an impossibility.

Zero-hour contracts are common in the fast-food and service industries. Companies like McDonald's, Burger King and Wendy's still use them. Young and vulnerable workers are particularly affected. Probably among these are the offspring of National Party voters who are working in fast-food outlets while, say, in tertiary study. A message about the implicit unfairness of their lot will have reached the Beehive.

Mr Woodhouse insisted initially that there should be no rush to reform because zero-hour contracts could be valid in certain circumstances. That may be so with casual agreements involving university students, where it suits either party to be able to say yes or no to work. In that situation, the balance is equitable. But this can hardly be used as a justification for maintaining the practice in circumstances where the balance is clearly unfair.

Already, the minister has indicated change will occur in two areas. First, restraint of trade provisions that stop employees working for a competing business if their employer does not provide their desired hours of work will be outlawed. Second, shifts will no longer be able to be cancelled at short notice. The restraint of trade is especially unfair. It prevents workers taking on extra part-time work to provide far greater income certainty.

Mr Woodhouse must not stop there, however. The Restaurant Brands employees won a guaranteed number of hours of work. That must also be part of the Government's changes. The law must specify that workers paid at an hourly rate are assured an agreed weekly minimum number of hours. Employees will derive a benefit in terms of certainty and security. Workers, for their part, demonstrate far greater loyalty to employers if they feel they are being treated fairly. As with the best workplace law, advantages will flow to both sides.