Changes to Zero Hour Contracts

“Government crackdown on zero hours contract abusers”

Vince Cable announced on 25 June 2014 that the government was cracking down on the abuse of zero hours contracts. The key measure they plan to take is to ban exclusivity clauses. These clauses mean that an employee on a zero hours contract is prevented from working for another employer even if their current employer is not providing them with any work.

As BIS put it: “The use of exclusivity clauses in zero hours contracts undermines choice and flexibility for the individuals concerned.” They claim this will help about 125,000 employees.

However, as a zero hours contract gives the employer the right not to provide the employee with any work employers will be free to refuse to provide work to employees who do find other work elsewhere. It will be difficult for an employee to prove they stopped being given work for this reason, so this ban may well have zero impact.

This action follows a government consultation into zero hours contracts which received over 36,000 responses. 83% were in favour of banning exclusivity clauses in zero hours contacts.

The Business Secretary also announced that the government will:

• consult further on how to prevent rogue employers evading the exclusivity ban, for example through offering 1 hour fixed contracts
• work with business representatives and unions to develop a code of practice on the fair use of zero hours contracts by the end of the year (2014)
• work with stakeholders to review existing guidance and improve information available to employees and employers on using these contracts

Tim Thomas, Head of Employment Policy at EEF, the manufacturers’ organisation, said:

Zero hours contracts occupy an important space in the labour market where, properly used, they provide flexible employment in job roles where open-ended contracts are unsuitable.

For manufacturers where skills are in scarce supply, zero hours contracts can help employers to tap into specialist skills when they are needed, such as drawing on the experience of older workers.

The way forward set out in the Small Business, Enterprise and Employment Bill treads a fine line between supporting the majority of workers who want to continue to work on their zero hours contracts and limiting their use where they are neither necessary nor appropriate.

The ban will be part of the Small Business, Enterprise and Employment Bill, which is being introduced to Parliament today (25 June 2014)

Paul Whitfield can be contacted on 0161 2831276 or paulw@foxwhitfild.com

www.foxwhitfield.com

Employment Law Solicitors – Head Office based in Manchester with offices located throughout the United Kingdom.