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28 April 2015

Zero hours contracts: Further Government proposals

Zero hours contracts have recently become a big political issue, regularly making the headlines, with a focus on abuse by employers. Speaking on Sky News this month, Work and Pensions Secretary Iain Duncan Smith MP has suggested renaming zero hours contracts as "flexible hours contracts", claiming that they help employees to maintain a good work-life balance.  Shadow Business Secretary Chuka Umunna MP accused Mr Duncan Smith of "trying to dress up insecurity as flexibility".

For all the media attention, however, there is some confusion about zero hours contracts and what they mean, which in part arises from the fact that the terms “zero hours” is not defined in legislation.

A zero hours contract is generally understood to be an employment contract between an employer and a worker, under which the employer is not obliged to provide the worker with any minimum working hours and the worker is not obliged to accept any of the hours offered.  Some employers, however, use exclusivity clauses, preventing an individual from accepting work offered by another employer or requiring them to obtain consent in order to do so.  The Small Business, Enterprise and Employment Bill, currently progressing through Parliament, includes a ban on the use of such terms in zero-hours contracts.

The Government has since consulted on whether it needs to take any additional measures to tackle avoidance of the ban on exclusivity clauses.  Following the consultation, it has issued draft regulations designed to prevent avoidance of the ban.

The draft regulations include the right for zero-hours workers not to suffer detriment on grounds that the worker has worked elsewhere.  The prohibition on exclusivity clauses is also extended to all contracts under which the individual is not guaranteed a certain level of weekly income (the actual level is yet to be determined).  We do not yet have an implementation date for the regulations, which will now be considered by Parliament.