Greater Manchester employers to voluntarily veto zero-hours contracts

Experts welcome Good Employment Charter but question how similar initiatives in different cities will be aligned, validated and enforced

Employers within the Greater Manchester Combined Authority (GMCA) are expected to agree to a ban on zero-hours contracts as part of the region’s Good Employment Charter, launching later this week.

More than 60 businesses have signed the charter, which includes a voluntary boycott of zero-hours contracts, with a further 100 in the process of signing up, the Financial Times has reported.

The charter was created by Andy Burnham, the region’s Labour mayor, amid growing concerns around insecure work and in-work poverty. It aims to improve standards across all GMCA employers.

As well as paying the UK living wage as set by the Living Wage Foundation – which is higher than the statutory national living wage set by government – signatories are expected to be able to show their employees have a secure income and clarity over working hours. The charter also calls for contracts to reflect the hours worked and for employers “not to use unnecessary forms of insecure employment”.

The FT reported signatories would be more likely to win public procurement contracts in the city and would be eligible for investment from the Greater Manchester Business Fund. 

Commenting on the news, Alex Watson, director and employment lawyer at Fieldfisher, said he had seen an increase in the number of employers making vocal commitments to adopting employment best practice. As well as positively influencing public perception of a business, good practices could also help organisations win public sector contracts, Watson confirmed.

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“As with the benefits of preferential treatment in Manchester public procurement processes for charter members, we are beginning to see an increase in the wider focus of supply chain requirements for employers to adopt many of these best practices in order to be eligible for large commercial contracts,” said Watson.

“As these attitudes filter down, we expect to see increased commercial opportunities for early adopters of initiatives such as the Good Employment Charter and an increase in initiatives of this type."

However, employment experts have previously warned an outright ban on zero-hours contracts could be harmful to some employees. 

The 2019 CIPD Megatrends report revealed only 2.7 per cent of UK workers were on zero-hours contracts and most workers were satisfied with the terms. Separate ONS figures released late last year suggested the majority of employees were happy with the hours they worked.

Duncan Brown, head of consulting at IES, said he welcomed initiatives such as the GMCA’s charter. “City employment initiatives are a great means of encouraging employers to provide good work and invest properly in their people rather than simply pursuing a lowest-possible cost – and sometimes short-sighted – employment model,” he said.

But there were a number of questions that still need to be addressed, Brown added. “These include how best to align initiatives in various cities for national employers and also how the different charters will be validated and enforced, as well as the funding of good work in sectors such as social care,” he said.

The charter’s website confirmed it is open to employers from all sectors, with Kellogg’s, KPMG and ITV among its first signatories.

Burnham told the FT the charter would help GMCA residents develop the skills to succeed, and find “good, secure jobs that pay a real living wage”.

“This Good Employment Charter is a major step towards making sure that new and existing jobs right across our city region are underpinned by a commitment to equality, fair pay and giving employees a say in how their workplaces are run,” he said.