Labour laws in Britain are vastly too strict and rigid, they were put together at a time when trade unions had excessive power which they abused on an immense scale, causing huge damage to Great Britain. They assumed that the economy consisted of large, rigid workforces in manufacturing, working set hours. But the trade unions went on to destroy much of the industries they were envisioning. So much of our economy today is utterly different, smaller workforces, very adaptable and dynamic, catering far better for customer demands. The trade unions are dinosaurs and their legislation is utterly out of time. It mostly needs repealing.
Without these archaic laws the labour market would be far better for everyone, the employers as well as the employees. Many inefficiencies would be removed and people would be far more likely to find jobs that suited their skills and lifestyles. The added flexibility would add much to the economy, increasing our international competitiveness and thus further reducing unemployment and increasing wages. All this is obvious to anyone with a grasp of economics. So it eludes the left.
Our rigid employment laws are so bad that companies, in order to competitively look after their customers, have been forced to adopt a whole range of solutions, as you can see in the diagram above. Outsourcing, agency contractors, self employment, job sharing and zero hours are just some of the necessary solutions. Without them our economy would be in very big trouble indeed.
Take someone who owns a wedding venue. On a Tuesday in February the chances are that they will need zero staff. On a Saturday in June the chances are that they would need a lot of staff. Their labour demand varies with the day of the week and the month of the year. In this situation the left and the unions demand that the venue employs the maximum number of staff they need on full time contracts and pay them every week of the year. After all, this is how a state owned business would want to do it. But it would be incredibly silly, something would have to give. Weddings would become incredibly expensive, the employees would be incredibly badly paid, state subsidies would be needed or the venue would go bust.
Very many businesses are like the wedding venue, to a lesser or greater degree, and labour flexibility is incredibly important if they are to survive and prosper in the market and if they are going to be in a position to give their customers the best products and services. Our economy needs more labour flexibility, not less. With greater flexibility everyone benefits, except for the trade unions.
And of course most employees who choose flexible working prefer it. Many polls have proven this. It better suits their lifestyle. A rigid working week would not suit them. Many people choose to have more than one flexible job so they can maximise their flexibility and their earnings. Perhaps doing little during school holidays but doing a lot when saving up for a holiday or a wedding. Everyone wins.
The Chartered Institute of Personnel and Development (CIPD), polled 1,000 workers (a statistically valid sample), and in August 2013 reported that approximately 1 million workers in the UK, which is 3-4% of the workforce, were working with a zero-hour contract. Around 38% of these considered themselves to be employed full-time, working 30 hours or more a week. 16% felt that they did not have an opportunity to work enough hours. About 17% of private sector employers used these contracts while they were used by 34% of non-profits and 24% of public employers. such contracts were mostly used by hotels, catering and leisure (48%), education (35%) and healthcare (27%).
Sports Direct has 90% of its workers on zero-hour contracts, J D Wetherspoon, 24,000 staff, or 80% of its workforce, 90% of McDonald’s workforce in the UK – 82,000 staff members, Boots UK has 4,000, Buckingham Palace, with 350 seasonal summer workers, is a user, The National Trust uses them, so do The Tate Galleries. A whole raft of businesses that need great labour flexibility in order to look after their customers. Many of these employees would have no jobs without zero hours contracts and/or their customers would experience a far worse product.
There is a very easy, eminently sensible and incredibly simple way to get rid of zero hours contracts and that would be to get rid of most employment law, bring total freedom and flexibility to the labour market. Bring it into line with the social realities of our modern age. Everyone would benefit and we would have a more prosperous, happier and fairer society.