Zero hour contracts lead to destabilising lack of certainty

Image thanks to justiceeagan.                                                           Words by Sally Webster

Joe Carolan cracked it in May when he told NZME reporter John Weekes that it wasn’t until insecure hours practices were crowned zero hours that unions could ring fence the personal damage wrought by being shackled to them.

A lack of earning certainty from an employer you’re tied to can erode mental well-being, over and above the direct impact of an uncertain weekly budget. It’s no secret that the bulk of people affected are low-paid workers, mostly in the fast food and hospitality industries. Shoe string pay packets need more than anything to be consistent, especially if other low income issues are to be factored-in, such as paying down debt, the failure of which wreaks even more mental health havoc.

Tony Robbins, a once low skilled worker himself, may not be the success guru-du-jour anymore, but his rise to fame came largely based on six human needs. At the top of the list is Certainty: ‘assurance you can avoid pain and gain pleasure or comfort.’

Twentieth century psychotherapist Abraham Maslow, the father of the Humanist perspective, had this coined well before Robbins did. His Hierarchy of Needs is one of the most respected doctrines of modern day psychology. Our basic needs are food and water, shelter and warmth, then after that are security and safety, and so on right up to self-actualisation. In 2015, knowing what’s coming into an already stretched bank account sits squarely at the base of the pyramid.

Yet some businesses choose to ignore this basic psychological need and still expect staff to beam gratefully every single time they deliver room service or hand fries out at the drive-thru.

It can even be quantified in mathematical terms: The Certainty Effect stipulates that when there is a reduction in probability in a previously certain instance, like the chance of winning something being dropped from 80% to 20%, it creates displeasure. This leads to the perception of loss, risk aversion and a lack of trust; it is an ‘effect’ that is far more evident moving from certainty to uncertainty than from uncertainty to certainty. This is human nature – we operate best when we have a pretty good idea of what’s coming.

Carolan and other Unite unionists had been banging on this secure-hours door for ten years; on May 1, 2015 McDonald’s [New Zealand] opened it, saying they’d agree to get rid of all zero hours contracts. It was cause for national celebration.

“It wasn’t so much that people worked zero hours per week … it’s that people had zero hours guaranteed,” said Carolan. He added that middle New Zealand supported the abolition of them and the government would surely now step up to the plate.

But it’s now July, and Workplace Relations and Safety Minister Michael Woodhouse has instead sashayed around the issue with such non-committal flair we can probably expect to see him on the next series of Dancing with the Stars.

With the proposed Employment Standards Bill, Minister Woodhouse will prohibit many of the aspects of zero hours contracts: short notice shift cancellation, restricting opportunities for other employment, employer expectations of 100% availability at short notice. But there is no proposed law change that could punish businesses doing it.

In February this year, before the Employment Relations Amendment Act became law on March 6, University of Auckland Law Professor and Arbitrators and Mediators Institute panel member, Bill Hodge, told me that the rise of zero hours contracts were “an awful development. But I haven’t seen a case yet and I see all cases that come through the Authority.”

He went on to say that with many aspects of these contracts being unlawful, unfortunately people without legal contracts would not be able to lodge a complaint to the Authority anyway.

“They’ll have problems bringing a grievance to the Authority. What I can say is that anyone who is on a roster is not a casual worker – they are an employee either part or fulltime. If I’m an employer, as soon as I put someone on a roster they are no longer casual.”

Therein lies the catch: if you don’t put someone on the roster until 3 hours before you need them are they still officially on the roster?

An anonymous contract bearing the names of the Restaurant Association of New Zealand and law firm Hesketh Henry was given to Case Basket in May. It showed the position of a Waitress at $14.75 per hour required to be available 365 days a year, as and when her name appeared on the roster. While it stipulated the waitress must make it her responsibility to find out the contents of the roster in advance, it also stated that ‘flexibility is essential to providing staff to cover variable demands…accordingly your days and hours of work may be varied by the employer.’

Fred Adelhelm of Adelhelm & Associates says that there is nothing wrong with flexibility; this is an increasingly popular way of working for employers and employees globally and he supports clients developing it. But he warns against the use of zero hours contracts: “they are simply not defendable” he states.

“Flexible work arrangements are here to stay. Hiring employees in certain industries on flexible roster arrangements will continue to grow worldwide – the contractual framework however needs updating and modernising to ensure the balance of rights between employer & employee remains healthy.

“What is most worrying to me with the zero hours framework is that New Zealanders will become more and more desperate to hold onto work offered and therefore more likely to do things they would not have considered before: cutting corners to work more quickly that possibly infringe on safety standards, saying ‘yes’ to tasks the boss asks them to do that are clearly unreasonable, choosing not to complain about harassment and workplace bullying.”

He says this happens easily when staff feel they need to please the person in charge of writing-up or making changes to the roster.

Psychotherapist, blogger and Social Anxiety expert Kyle MacDonald says this employment unpredictability and potential for abuse are very worrying.

“Structure and predictability is important to most people, and [when there is a lack of this] the financial side of this can cause a huge amount of anxiety.

“Not having a daily or weekly structure can have a really destabilising effect. We know that a lot of people [who will end up on zero hours contracts] are young people already struggling on minimum wages. In their teens and twenties people are already at their most vulnerable in terms of anxiety and depression. They are our most vulnerable group – both socially and socio-economically.

“The other thing that troubles me about zero hours is that it is blatantly open to bullying. It seems a really obvious thing. Humans are humans and if you set up a structure where there are inadequate protections then bullying will happen: annoy the boss one day; find out you haven’t got any hours the week after.”

A wealth of global studies point to the negative mental health impact of being at the beck and call of an unscrupulous employer. The World Health Organisation’s Commission on the Social Determinants of Health 2008, shows that workers deemed to be casual or temporary are most susceptible to dire health outcomes: ‘Perceived work insecurity is a significant predictor of health problems, and people who report persistent job insecurity have significantly worse health and mental health symptoms, including depression, than those who have never perceived their jobs to be at risk’.

As MacDonald says, someone has to pick up the tab for this, but sadly most of the people who start suffering anxiety and depression as a result will not be classed as suffering acutely enough to get any government funded mental health treatment.

“With this erosion of workers’ rights it looks like we are blind to the actual real, human impact of this structure. In terms of business, what drops off the balance sheet here (probably because it was never there in the first place) is the human cost.”