UK Government proposals to ban exploitative zero-hour contracts are likely to strengthen worker rights. However, the proposals will enormously impact the higher education, technology, and digital markets sectors across the UK.
A blanket ban on zero-hour contracts would require businesses to rethink their workforce strategies—for instance, in situations where short-term contract work or specific expertise is needed on an ad hoc basis. While a blanket ban seems unlikely given the latest Government comments on this, any change will still have a significant impact.
University Sector
For several years, the University College Union (UCU) have been campaigning to end zero-hour contracts. Many universities have engaged in discussions with UCU to assess their usage and necessity.
Universities often hire people outside of regular academic jobs to help with various tasks that need flexibility, such as specialised teaching in certain subjects, or in roles like supervision or examination, usually getting paid by the hour. This system helps universities handle changing workloads while still providing a good educational experience.
Additionally, universities often rely on zero-hour contracts for professional services and facilities staff in hospitality and catering, where demand varies throughout the year.
Tech Sector
Similarly, workforce flexibility is crucial across the technology and digital markets (TDM) sector. In the technology sector, zero-hour contracts are used for temporary roles, project-based work, and freelancers. They allow flexibility for tech companies to scale up or down based on project needs and can give access to specialised skills without long-term commitments.
The proposed changes to zero-hour contracts will likely require companies in this sector to rethink their workforce strategies and possibly hire more full-time employees, which may increase operational costs.
Many technology companies utilise ‘bench management’ to fill critical roles or to meet sudden demand. The new proposals regarding the predictability of work may make it more challenging for companies to maintain a readily available talent pool.
From a global competition perspective, this could create a more competitive landscape, as companies in the sector are bidding for both global work and talent. These stricter rules may adversely affect UK-based companies operating in the global market, particularly when competing with international companies that are not subject to such rules.
Ultimately, the use of zero-hour contracts allows tech companies to drive innovation solutions by taking calculated risks and adapting quickly. Limiting or banning these contracts could hinder innovation and slow the pace of progress across the sector.
