Zero hour contracts are ‘worker’ contracts where the employer does not need to guarantee hours of work, and the workers are only paid for the work they actually do. It’s estimated around 1.4 million workers in the UK are on contracts that offer no guarantee of hours (as at April 2014, Office for National Statistics). The benefit to both employers and employees is the flexible nature of the contracts, especially to sectors that fluctuate in demand, so it is no wonder they are most prevalent in the hotel, leisure, education and health care sectors.
Why the bad publicity?
Although flexibility may be an incentive to employers and employees surrounding their employment, unpredictability, exploitation and alleged abuse of these types of contracts certainly may not. The inclusion of exclusivity clauses and lack of clarity for workers on these contracts can cause fear of future earnings and result in unfair treatment. What most employees might not realise is that zero hour workers are entitled to annual leave, National Minimum Wage and pay for work-related travel, in the same way regular workers are.
There is currently no statutory or common law definition regarding zero hour contracts and therefore this lack of consistent definition makes it difficult to identify a solution to their misuse. Current limited case law has left it up to the court to interpret the status of the employee upon deciding their rights. The court will consider various factors in deciding whether the worker may be entitled to additional protection outside a zero hour contract, based on the conduct and intention of the parties. Due to the lack of legislation surrounding this area – it’s not surprising that zero hour contracts have become a hot political topic over the last year.
Aim for the future
With a legislative measure imminent, Vince Cable announced that the government is looking at tackling the abuse of zero hour contracts to stop the exploitation of employees by the development of a code of practice. They are proposing to ban the use of exclusivity clauses, which prevent workers from working for another employer under their contact. The ban is to be implemented by Clause 139 of the Small Business, Enterprise and Employment Bill, which will insert 2 new sections into the Employments Rights Act 1996. The bill is currently with the Public Bill Committee, and if passed, it could lead the way in legislation for a clearer, fairer use of such contracts in the future.
If you have any concern over the use of these contracts, please do not hesitate to contact us for advice.
James Haley, Solicitor & Director, Just Employment Ltd.