Why is Mike Ashley in trouble over zero hour contracts?

Trade union Unite has called for an urgent meeting with Sports Direct owner Mike Ashley over the treatment of Sports Direct staff after it was found that all of it’s part-time employees – accounting for 90 per cent of its workforce – are employed on zero hour contracts.

A zero hour contract requires employees to be available for work when called upon, but with no guaranteed hours or times. Critics say that this is a form of exploitation, giving staff uncertain incomes, limited job security, and reduced access to fringe benefits.

But zero hour contracts can be a good tool for businesses - particularly small and growing companies and those operating in seasonally-dependent industries like retail and hospitality - to react flexibly to fluctuating demand, giving them the confidence to grow when opportunities arise. And an expanding business (aided by a greater customer base deriving from more people in employment) can of course afford to hire more full-time staff. It clearly hasn't hurt Sports Direct, which reported a 40 per cent jump in pre-tax profits for the year to 28 April 2013 and underlying earnings growth of 22.1 per cent.

And this model of employment can provide flexibility for the employee as well as the employer. It can be a good option for students working around a timetable, those with caring responsibilities, or older people not ready to leave the workforce, for example.

With unemployment still high, particularly among the young, surely it is better to be employed in some capacity than not at all, even if it is just as a bridge between jobs or a stepping stone into a more stable role?

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