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Emma O'Connor
Emma O'Connor,
HEAD OF TRAINING
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Zero-hours contracts explained
23 July 2014

Zero-hour contracts have been under the political spotlight over recent months but what are they and are they still valid – and in what circumstances could they be used?...

What is a zero-hours contract?

A zero-hours contract is a contract for casual working. Under these contracts the employer does not guarantee they will provide the worker with any work and the worker is only paid for the work they carry out. If they are not working, they do not receive any form of remuneration. The workers are; however, expected to be available for work if so needed by the employer.

Recent Controversy

Zero-hours contracts have attracted a lot of attention over the past 18 months due to alleged abuse by employers. Zero-hours contracts have been used to try and avoid individuals being classed as employees when in reality, if you examine the facts, they are indeed employees. More recently, the use of exclusivity clauses in zero-hours contracts has come under the spotlight. Employees have been making workers agree not to undertake work for anyone else, even when not currently doing any work for the employer under the zero-hours contract.

Government Consultation

At the end of 2013, the Government launched its consultation on zero-hours contracts. The aim of the Government was to “maximise the opportunities of zero-hours contracts while minimising abuse and setting out core standards that protect individuals”. The consultation closed in March 2014.

The proposed change

The Small Business, Enterprise and Employment Bill 2014 has been introduced into Parliament. Within the first draft of this Bill is a provision which bans exclusivity clauses from zero-hours contracts. This proposal has come after a huge 83% of the 36,000 responses to the consultation were in favour of making exclusivity clauses unlawful.

It is understandable that individuals need to be protected and be free to undertake other work when they are not working for the employer under the zero-hours contract. However, if individuals are free to undertake other work during an assignment this may decrease the standard of work and could decrease the likelihood of their availability to do the work in the first place.

Effect on employers

In many cases the removal of exclusivity clauses will effectively mean that individuals engaged under a zero-hours contract are no more beneficial than agency/temporary staff. Employers will no longer have a trusted bank of individuals who are already trained and understand the business that they can effectively call upon at any time. However, the flexibility that zero-hours contracts afford will still be of benefit to both employers and workers, without leaving the worker in an uncertain situation.

It remains to be seen whether the wording of the bill will retain a total ban on exclusivity clauses, or whether it will be amended to oblige the individual to devote the whole of their time and abilities to the employer once they have accepted some work. 

For further information, please contact our Employment Team on 0118 952 7284 or submit an enquiry.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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