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Nick de Bois: The solution to zero hour contracts is a more free labour market

Nick de Bois is the Member of Parliament for Enfield North and a Secretary of the 1922 Committee. Follow Nick on Twitter.

Screen shot 2013-08-02 at 21.11.49I am not a fan of zero hour contracts quite because I don't consider them a fair deal for an employee - and because I therefore would not have felt comfortable as an employer using them. I would not have believed that they would have helped to deliver better productivity, and know that they certainly would not help cultivate loyalty to the company. In short, I would have assessed they were not necessarily good business.

However, I can completely understand why some employers are using them, and could continue to do so. Much of the debate this week about the zero hour contracts has been on how disproportionately unfair they are on the employee - and rightly so, notwithstanding the fact that the employee does make a conscious choice to sign up to the terms. He or she does not have to, and can of course walk away if a better offer comes along.

But during my time as an employer, I witnessed such a rapid growth in employment social contract legislation that taking on a new employee became something you chose to do almost as a last resort.  Such was the thirst for employee protection laws and rights that balance in the so- called supply side of the market was abdicated in favour of extremely onerous legislation, for SMEs in particular. The changes made by this Government have gone someway to redress thy balance, and deter frivolous claims against employers whilst retaining rights for employees. That's a good start.

Employers, as in many other walks of life, will devise methods of making the labour market as flexible as possible - more so in tough trading conditions. Governments and lawyers often do the opposite, as we have seen over the last two decades. Zero hour contracts are in part a product of over regulation, and whilst I don't believe they will ever be used widely by employers, the sooner we liberalise the employment market further we hasten their demise.


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