Paul Mander: The move towards new kinds of employment contracts

People are looking for more from work than just pay. Whether it is unusual benefits, a better working environment or atypical working hours, there is little doubt that employers must try to attract and retain talent by means that go far beyond pay alone. One way in which employers can do that, and a way that actually works well for many employers, is the use of temporary and fixed-term contract and consultancy arrangements.

Flexible working

At the lower end of the pay scale, these contracts often manifest themselves as zero-hours contracts and almost everyone hates them. At the upper end of the pay scale, though, consultancy arrangements, temporary contracts and fixed-term contracts usually tend, when judged hourly, to be more expensive for employers.

Having said that, the exposure and cost tends to be more readily ascertainable as benefits are limited and, more importantly, the people hired under them can be let go when the job is done. These contracts are often seen as far less one-sided and employer-friendly as the individuals hired under them often have no desire to stay on indefinitely and are frequently committed to a more flexible working life.

Benefits for lower paid workers

Successive governments are not as keen on this flexible working as the workers themselves, probably because they perceive that ‘flexibility’ tends to disadvantage the lower paid in society. So we have, among other legislation, the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 and the Agency Workers Regulations (2010 and 12015) which both provide added benefits to agency and fixed-term workers which consequently make their arrangements less flexible (and higher risk) for employers. Despite this, the arrangements are increasingly common.

One of the impressive things about Generation Z is its unwillingness to be tied to the more conventional ways of working the past: the salaryman, ladder-like career path; the requirement to work full-time; the need to work all year apart from during holidays; the need to work continuously throughout one’s career. These traits it seems are leading to an increase in more unusual contractual arrangements despite successive governments putting hurdles in the way.

This column first appeared in the REBA/JLT Employee Benefits New Model Reward Research 2017. Download full 46 page PDf of the research here.

Paul Mander is partner and head of employment team at Penningtons Manches