Zero-hour contracts ban 'overreaction' by unions, Labour - government

Workplace Relations and Safety Minister Michael Woodhouse. Photo / Mark Mitchell

Zero-hour contracts work well for some people and stamping out some of the worst aspects that can come with them is better than the "overreaction" of a total ban, the Government says.

Unions have campaigned for the contracts to be outlawed. Labour has lodged a member's bill against them and maintains the changes being considered do not address the core problem with the contracts.

Zero-hour contracts require workers to be available for work, but do not guarantee any set number of hours.

They are common in fast food and service industries.

Workplace Relations and Safety Minister Michael Woodhouse said there appeared to be significant problems with some contracts.

But banning them was an overreaction.

"Casual agreements are appropriate and legitimate arrangements in a fair and flexible workplace," Mr Woodhouse told the Herald.

He admitted there were problems with some contracts and said he had asked officials to investigate.

If the advice matched Mr Woodhouse's provisional view, practices that would be banned include:

Restraint of trade clauses that stop someone working for a competing business if an employer did not provide the desired hours of work. Mr Woodhouse said such restraints were not appropriate for industries such as fast-food outlets.

The cancellation of shifts at short or no notice.

Deductions from workers' wages in cases such as petrol-station drive-offs - where people leave without paying for fuel - which gained media attention last year. Mr Woodhouse said such practice was illegal, but he would likely amend legislation to make that absolutely clear.

Labour leader Andrew Little said it was good to see the Government had discovered that "zero-hour contracts are not just unpopular among workers but among a lot of employers themselves".

His party last week lodged a Certainty at Work member's bill against zero-hour contracts, which sponsor Iain Lees-Galloway said would get rid of contracts that have no place in modern employment relations.

The bill, which has been submitted into a ballot, requires employment agreements to include an indication of the hours an employee will have to work to complete tasks expected of them.

Mr Lees-Galloway said the Government appeared to be trying to mislead employers into think the bill would ban casual working agreements, which was not the case.

"Zero-hour contracts are permanent, part-time contracts with no set hours. They are very different from casual contracts."

The changes being floated by Mr Woodhouse did not address the core problem with such contracts, which was total uncertainty of hours.

For example, a young man who approached Mr Lees-Galloway was on a permanent, part-time contract and was told he would get 20 hours of work a week.

"Then, all of a sudden, he was only being rostered on for 6 hours a week. With no indication from his employer that they had any issues with his performance. It was out of the blue."