Zero-hour contracts in the news again

Posted on Jun 26th, 2013 | Employment

In our article ‘What are zero-hour contracts‘ we looked in detail at what these contracts are, and whether casual workers could ever become employees.

The Recruitment and Employment Confederation, while acknowledging that some zero-hour contracts have been implemented poorly, believe that with only 1% of the jobs market involving zero-hours contract they are essential to allow businesses to ‘flex’ their staffing base when demand fluctuates and allow them to remain competitive (rather than employing too many permanent staff); and good for employees to get them back to work and be in control of the hours they work to fit in with other responsibilities they may have.

The TUC have called on the Government to start a review of these contracts, which the Government have just announced they will do. The TUC believe that many zero-hour contracts are exploitative as individuals don’t know how many hours work they’ll get, so how much pay they’ll get.

Zero-hour contracts have been in the news a lot this month – here we look at what is being said:

  • The Office for National Statistics published figures in May revealing that the number of workers on zero-hours contracts had increased by 25% in 2012 to reach 200,000 (and increased by 150% since 2005).
  • The Labour Party had already announced, in May, that they would introduce a ban on these types of contracts if they get re-elected in 2015.
  • Some commentators believe that these arrangements leave workers open to exploitation (and at Workline we hear a lot about this), while others believe they offer real benefits to both employers and employees.
  • In announcing his review of zero-hour contracts in mid-June, Vince Cable the Business Secretary cited evidence that companies may be abusing vulnerable workers at the margins of the labour market, and that the Government “knew relatively little about is effect on employers and employees.”. “While it’s important our workforce remains flexible, it is equally important that is is treated fairly” Cable said.
  • The Department for Business, Innovation and Skills said they would undertake a fact-finding exercise by talking to a variety of stakeholders including trade unions and industry bodies in sectors where the contracts were in common use.
  • It is unlikely that the review will call for an outright ban of the contracts, but it may result in restrictions on their use or workers giving more employment protection rights and Cable will also look at the way people who are employed on these contracts are treated by the benefits system.

We’ll keep you updated as we know more! In Mid December 2013 Vince Cable announced the start of a consultation on the use and nature of zero-hours contracts, looking for views from various stakeholders, up to until March 2014. BIS has highlighted concerns at the use of exclusivity clauses preventing staff from working with multiple employers and the apparent lack of transparency of the contracts from both the employers and employees perspective. In August 2014 the Government announced the start of Consultation to look at how to ban exclusivity clauses.

A legal challenge to the use of Zero-Hour contracts at SportsDirect was launched in August 2013.

If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – you can retain us for as much time as you need. Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.

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Written by Lesley Furber

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