Zero Hours Contracts – a brief recap

Zero Hours contracts have regularly featured in the news in the last 12 months, with much criticism aimed at their increasing use.  In overview, Zero Hours contracts allow employers great flexibility in their workforce as employees are not guaranteed a number of hours of work and are only paid for the actual hours worked.  This can work well for both sides where an employee also needs flexibility, but is open to accusations of exploitation where the employer makes all the decisions.

In January 2014, the Government announced a Review into the use of Zero Hours contracts, with a public consultation and the Government reiterated today that it was analysing the research so far and would “respond in due course”.

The Labour Party join the debate

The Labour Party meanwhile has today revealed its policy intentions, with Ed Miliband detailing plans to tackle what he called the “epidemic” of zero-hours contracts if Labour were to win the 2015 General Election.

In September 2013, Ed Miliband appointed Norman Pickavance, the former HR director at supermarket chain Morrisons, to carry out a review into Zero Hours contracts.  The review appears to have persuaded Labour that the increasing use of Zero Hours contracts is a bad thing and the overall message of Mr Miliband’s comments today was one of increasing the rights of employees and restricting the freedoms granted to employers.

In a speech he gave in Scotland, Mr Miliband said: “Zero-hour contracts have spread like an epidemic across our economy.  The government’s own figures say they have increased three-fold since 2010 and some estimates suggest there are one million people on these contracts across the UK”

In commentary on the Labour Party website, Mr Miliband went further and said that Zero Hours contracts can sometimes offer “short-term flexibility for employers and employees alike” but added that most employers don’t use them because “widespread use of zero-hours contracts is incompatible with building a loyal, skilled and productive workforce”.

The Labour Proposals in Detail

In a bid to prevent what Mr Miliband has called the “worst abuses of the system”, Labour’s election manifesto will propose a number of employment law reforms affecting workers on Zero Hours contracts.
  • They will not be obliged to be available for work outside of their contracted hours
  • They will be free to work for other employers (currently exclusivity clauses can prevent this)
  • They will have a right to receive compensation if their shifts are cancelled at short notice
  • Their employers will be required to provide “clarity” (as yet undefined) about their employment status, terms and conditions
  • After 6 months on a Zero Hours contract they will have the right to request a contract with a “minimum amount of work” which could only be refused if the employer could prove that their business couldn’t operate any other way
  • After 12 months on a Zero Hours contract they will have an automatic right to a fixed-hours contract

The Government Response

In response to Mr Miliband’s comments today, a spokesman for the Department for Business, Innovation and Skills said that while Zero Hours contracts could offer “welcome flexibility”, the recent consultation had shown that there had been “evidence of abuse”.

He added that 30,000 responses to the consultation had been received which were currently being worked through, however the government did not intend to “ban Zero Hours contracts overnight”.

Our Thoughts

With a number of proposals for change on the table from Labour and a less than ringing endorsement from Government, we would hazard a guess that there will be changes to the law on Zero Hours contracts before too much longer.  If the changes can retain much needed flexibility while eradicating the worst abuses by employers then we believe that they will be broadly welcomed.

If you would like to speak to one of our expert employment law solicitors about any issues surrounding the use of Zero Hours contracts, or would simply like to know more, please contact us today.

Tel: 01245 893400
or use the Enquiry Form on our Contact Backhouse page.