Zero Hour Contracts in the Hospitality Industry - Essay Example

?‘Zero-Hour’ Contracts in the Hospitality Industry Table of Contents Summary 3 The Policy Background 3 Assessment of the Debate to 5 Affect Of Zero-Hour Contract on Hyatt Regency London 7 Options for Action 9 Recommendations 10 References 12 Bibliography 15 Summary The policy issue in this essay focuses on Zero-Hour employment contract as practiced within the UK hotel industry, aiming at critically analysing the concept and comprehending its implications for both the employees and the employer of Hyatt Regency London. Observably, this sort of contract is argued to possess both negatives and positives influencing the commitment levels of both the employer and the employee and hence, affecting organisational efficiency at large. However, such contract accompanies with aspects including lack of job and financial security for the employees and lack of availability of skilled and loyal staff for the company. With due considerations to all these aspects, certain recommendations have been made to Hyatt Regency London when applying the policy of zero-hour contract. The Policy Background The policy depicted in this briefing is based on the concept of ‘Zero-Hour’ Contracts. As the name itself suggests, ‘Zero-Hour’ Contracts is a type of employment contract that is usually used in the UK in compliance with the Employment Rights Act of 1996 of the country. Basically, this contract is drawn in a written format, where it contains a statement regarding the terms and conditions of employment built amid an employer and an employee. Under such contracts, an employer does not guarantee an employee to provide work and pays for the work that is actually being done. In precise, the contract provides right to the employers that enables them to take a call on staffs when they are not needed and does not pay them for that duration, which further makes the entire process a time-efficient one. It has recently been one of the major issues and a component of extensive debate worldwide. It can be considered as a rising issue in various sectors of business including the hospitality industry owing to the fact that it regarded as an approach, which employers find attractive as it is quite a cost saving measure. In the hospitality sector, companies are therefore observed to be recruiting staff members on the basis of ‘Zero-Hour’ Contracts. However, it is deemed that the aspect of ‘Zero-Hour ’ Contracts is not quite a profitable prospect for the employees as it is for the employers in the UK hotel industry, as they are only entitled for salary nominal payment for the period they actually worked for the business with no financial security. Moreover, the concept of ‘Zero-Hour ’ Contracts is also seem to be violating some of the key employment rights that further make it a serious issue altogether (Grice, 2013; ACAS, 2012). Since, the concept has certain major advantages and loopholes at the same time; its extensive implementation has become quite uncertain and a major point of discussion, which further presents it as a major issue in the modern day context. As addressed above, the policy of ‘Zero-Hour’ Contracts has major impacts on both the employer and the employees as the major stakeholders of the policy issue. Owing to this contract, employers are entitled to be benefited with greater flexibility to meet the demands of the customers. It also reduces cost of the company as very little has to be spent on employee recruitment and training. Furthermore, as per the contract, employees will be able to get flexible hours to maintain a better work-life balance. These aspects encourage many to support the concept. While the opposers to the policy issue argue upon certain facts including violations of employment rights and salary payment approach under such contracts (Grice, 2013; ACAS, 2012; Barnett & Scrope, 2008). Assessment of the Debate to Date The concept of Zero-Hour ’ Contracts has become an importance topic of debate all over the world, especially in the hospitality sector where the probability of its implementation is considerably higher as compared to other industry structures (Lynch, 2013). Accordingly, a report of Sky News (2013) depicted that the concept of Zero-Hour Contracts has been portrayed in quite an unfair manner. Reportedly, unlike the negative assumptions taken in relation to the concept, employees who are involved with Zero-Hour Contracts can be observed as happier as other workers owing to the fact that it helps to manage a better work-life balance and imposes limited stress (Brinkley, 2013). In the briefing of Sky News (2013), according to a survey conducted by Chartered Institute of Personnel and Development (CIPD) most of the workers do not want to work more hours and consequently, they tend to agree with the content of the contract. Aided by the contract, workers are now able to have flexible working hours, which is favourably impacting their personal life (Sky News, 2013; Pennycook & et. al., 2013). In similar regard, the report of Rochdale Online (2013) depicted that the debate over the implications of Zero-Hour Contracts has been more concentrated upon its disadvantages somewhat in a bias manner. It is thus believed by experts that the concept of Zero-Hour Contracts has been quite underestimated by people, deciphering a greater degree of ignorance towards measuring its benefits in the current day context. Therefore, it is very much essential to maintain a parity between the two sides of the policy issue to note it as beneficial or otherwise, with due consideration to the interests of both the employees and the employers in the industry (Crain Communications Inc, 2013). It has been with emphasis to these aspects that Wilson (2013) depicted the concept of Zero-Hour Contracts to be essentially promoted with its extensive implementation in various industry sectors in order to leverage the benefits provided by the same to the employees and to the employers as well. For instance, in a report by Wigantoday (2013), a particular section of workers were noted to have gone on strike to show their disagreement on the decline of the ‘Zero-Hour ’ contract, advocating that such contracts can be much desired by the employees. Hence, the contract can be regarded as quite a vital and a favourable prospect for the workers who are dealing with deteriorated living standards (Wigantoday, 2013). Hence, the above mentioned views of people depicted that the concept of Zero-Hour contracts should be accepted universally and applied in a wider sense rendering due focus on its associated advantages rather than disadvantages. Observably, both the employers and the employees have been the gainers from the policy of ‘Zero-Hour’ contracts in the past as well as in the current scenario. On one hand, employees gain flexibility of work hours as per the contract, while on the other hand, businesses avail the opportunity to operate in a cost effective manner. However, at the same time, both the stakeholders of the contract also have to lose on certain aspects. As per the contract, the employees lack the guarantee of regular work from the employers, while employers, on the other hand, lack the desired level of loyalty from the employees as they are not permanent in the business, which can raise the training costs as well as the operational costs of the company in managed inefficiently (Recruitment International, n.d.). Affect Of Zero-Hour Contract on Hyatt Regency London The above discussed aspects about ‘Zero-Hour’ contracts will certainly have a strong impact on the approach and operations of players in various industry sectors. In order to get a compressive understanding about this aspect, the impact of such contract on a renowned hospitality brand, i.e. Hyatt Regency London will be vital to consider. Apparently, the earlier discussion of the paper depicted that the concept or the policy of Zero-Hour contracts is suitable for application in the hospitality sector to a certain extent but not entirely. Contextually, the briefing will ensure that Hyatt Regency London, which is also the targeted audience (as an employer) for this briefing, will be able to have a clear understanding about the implementation of the contract in its employment policies. There has been an increasing debate on the advantages of the concept of Zero-Hour contracts and being emphasised on the same, this briefing will enable the company to get a succinct idea about how its operations might get impacted from the implementation of this policy measure. Owing to the fact that it has extensive discussion on the concept of Zero-Hour contract, the briefing report might probably impose an effect on the stand of the target organisation, i.e. Hyatt Regency London. Arguably, perhaps due to the extensive debate about this form of contract and its associated risks, Hyatt Regency London must have deciphered certain reluctance towards applying the policy in its employment policies. It will be crucial to mention that the number of employees who are under the Zero-Hour contract has increased quite rapidly from the past year, which now stands on over 200,000 in number and shows 23% increase from the preceding year (Unison, n.d.). The graph below reflects upon the increased number of employees under the Zero-Hour contracts in the last few years of hospitality business. Fig: Employees under Zero-hour Contract Source: (Unison, n.d.) It is expected that this particular fact will surely encourage the target organisation, i.e. Hyatt Regency London to implement the concept in drawing this contract with its employees and take maximum benefits out of the same. To be noted, the information in the briefing will affect both the employees and employer in the Hyatt Regency London. This is owing to the fact that the benefits as well as the disadvantages (which is quite minimal) of Zero-Hour contracts will have impacts on both the stakeholders associated with the policy in a favourable or unfavourable manner respectively as discussed above. Nevertheless, it will be crucial to state that the organisation must change its thinking towards the concept of Zero-Hour contracts and give it a serious consideration to be implemented in its employment policies. Contextually, the company should focus more on the benefits of Zero-Hour contracts rather than emphasising the loopholes, which can be controllable up to an extent with the implementation of effective remedial strategies. Options for Action The target audience of this briefing have certain options that it can adopt in the future context in case the approach of Zero-Hour contracts fails to deliver the desired results, owing to the associated disadvantages it possesses. Accordingly, the organisation will have the options to adopt the employment law of the UK, which is deemed to get reviewed by the government in the coming years, making it equitable with that of the zero-hour contract. Furthermore, the company will also have the option to adopt approaches when providing flexible working hours for older employees or parents so that they can balance their work-life with utmost efficiency. This shall also ensure limited stress on the workforce and contribute to employee satisfaction. Moreover, this approach in the future context will not only be helpful for the employees, but will also allow the employer, i.e. Hyatt Regency London, to get skilled employees further benefiting both the stakeholders. Furthermore, it can also be stated that these options will be quite feasible for the company as will not require huge sum of resources including funds, making the entire policy application a cost and time efficient venture (Crown, 2013). Hence, it will be quite a vital prospect altogether. Recommendations It is advisable that Hyatt Regency London avoids a wait-and-see approach; rather, it should implement or adopt the contract in its operations and depict its effectiveness for a considerable period of time before adopting other steps with regard to its employment policies. This can be justified from the fact that currently there are various small and big organisations operating in the UK hospitality industry with the approach of Zero-Hour contracts deciphering utmost effectiveness. Some of the companies include Sports Direct, J D Wetherspoon, Cineworld and McDonald’s among others (Hall, 2013). These companies are involved in extensive implementation of the Zero-Hour contracts. Though some challenges prevail in dealing with such contracts, its advantages should not be ignored, when taking the advantages of Zero-Hour contracts (Graaf-Zij & et. al., 2009). Hence, the company should test the efficiency of the zero-hour contracts by implementing the same in their operations. This is because of the fact the concept of Zero-Hour contract is quite vital and it has certain noteworthy benefits for both employers and employees. However, prior to the implementation of the concept of zero-hour contract, the company should take an approach of extensive research in this regard in order to affirm the prospects of the concept both for its present and future operations. The company must also identify the benefits that employees deserve as per the contract and ensure that its employees under this contract are able to obtain the desired legitimate benefits from it, to avoid any sort of misuse of the policy measure that can also be attributed as among the legal rights of the employees (Advice Guide, n.d.). Critics of the policies will quite likely advice that the company should not adopt the contract stating that it might impose negative impacts on its operations owing to the loopholes associated with such policies. In order to deal with such issues the company should develop or collaborate with a commission that deals with issues related to employment rights, giving equal priority to the organisational and the employee interests. References Advice Guide, No Date. Contracts of Employment. Home. [Online] Available at: http://www.adviceguide.org.uk/england/work_e/work_rights_at_work_e/contracts_of_employment.htm#contracts_without_specific_working_hours [Accessed December 01, 2013]. ACAS, 2012. The Rise of the 'Zero-Hours' Contract. Home. [Online] Available at: http://www.acas.org.uk/index.aspx?articleid=3886 [Accessed December 01, 2013]. Barnett, D. & Scrope, H., 2008. Employment Law Handbook. Labor laws and legislation. Brinkley, I., 2013. Flexibility or Insecurity? Exploring the Rise in Zero Hours Contracts. The Work Foundation, pp. 1-29. Crain Communications Inc, 2013. UK – Zero-hours Contracts Underestimated, Oversimplified, And Unfairly Demonised. Home. [Online] Available at: http://www.acas.org.uk/index.aspx?articleid=3886 [Accessed December 01, 2013]. Crown, 2013. Making the Labour Market More Flexible, Efficient and Fair. Home. [Online] Available at: https://www.gov.uk/government/policies/making-the-labour-market-more-flexible-efficient-and-fair [Accessed December 01, 2013]. Graaf-Zij, M. D. & et. al., 2009. Stepping Stones for the Unemployed: The Effect of Temporary Jobs on the Duration until (Regular) Work. Springer. Grice, A., 2013. ‘Zero-hours’ Contracts for Workers to Be Reviewed by Coalition. Home. [Online] Available at: http://www.independent.co.uk/news/uk/politics/zerohours-contracts-for-workers-to-be-reviewed-by-coalition-8656328.html [Accessed December 01, 2013]. Hall, J., 2013. They won't be loving' it: McDonald's Admits 90% Of Employees Are on Zero-Hours Contracts without Guaranteed Work or a Stable Income. Home. [Online] Available at: http://www.pitmans.com/news/zero-hours-contracts-an-important-tool-for-any-hospitality-business [Accessed December 01, 2013]. Lynch, J., 2013. Zero-hours contracts – An Important Tool for Any Hospitality Business. Home. [Online] Available at: http://www.pitmans.com/news/zero-hours-contracts-an-important-tool-for-any-hospitality-business [Accessed December 01, 2013]. Pennycook, M. & et. al., 2013. A Matter of Time: The Rise of Zero-hours Contracts. Resolution Foundation, pp. 1-22. Rochdale Online, 2013. Debate on Zero-Hours Contracts Needs Greater Focus on the Benefits. Home. [Online] Available at: http://www.rochdaleonline.co.uk/news-features/1/business-news/83890/debate-on-zerohours-contracts-needs-greater-focus-on-the-benefits [Accessed December 01, 2013]. Recruitment International, No Date. Who are the real winners and losers in zero-hours contracts Ask Networkers International? Home. [Online] Available at: http://www.recruitment-international.co.uk/news/who-are-the-real-winners-and-losers-in-zero-hours-contracts-ask-networkers-international-19762.htm [Accessed December 01, 2013]. Sky News, 2013. Zero-Hour Contracts 'Unfairly Demonised'. Home. [Online] Available at: http://uk.news.yahoo.com/zero-hour-contracts-unfairly-demonised-084512748--finance.html [Accessed December 01, 2013]. Unison, No Date. Zero-Hour Contracts. Home. [Online] Available at: https://www.unison.org.uk/upload/sharepoint/Briefings%20and%20Circulars/Zero%20Hours%20Factsheet.pdf [Accessed December 01, 2013]. Wigantoday, 2013. MP Nandy in New Zero-Hour s Blast. Home. [Online] Available at: http://www.wigantoday.net/news/local/mp-nandy-in-new-zero-hours-blast-1-6212215 [Accessed December 01, 2013]. Bibliography Boella, M. J., 1999. Principles of Hospitality Law. Cengage Learning EMEA. Crown, No Date. The National Minimum Wage Regulations 1999. Home. [Online] Available at: http://www.legislation.gov.uk/uksi/1999/584/made [Accessed December 01, 2013]. Clements, S., 2013. Zero-hours ContractsAren’t the Problem. Poor management is. The Guardian. [Online] Available at: http://www.theguardian.com/commentisfree/2013/nov/27/zero-hours-contracts-problem-poor-management-flexibility-employers [Accessed December 01, 2013]. Inman, P., 2013. Zero-hours contract workers in UK find their shifts are cancelled at will. The Guardian. [Online] Available at: http://www.theguardian.com/uk-news/2013/nov/25/zero-hours-contract-workers-shifts-cancelled [Accessed December 01, 2013]. Read More