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Zero-Hours: Seeking Successful Solutions

Zero-Hours: Seeking Successful Solutions

Vince Cable announced plans this week to legislate against employers’ ability to use “exclusivity clauses” in zero-hours contracts, and to give this type of contract a statutory definition. As discussed in our blog ‘Zero Hours: Plenty Problems’ earlier this month, the use of zero-hours contracts has come in for much criticism.  The main criticism has been due to the apparent unfairness arising as a result of  the operation of “exclusivity clauses” which restrain employees from seeking employment elsewhere even when they are not being given any hours of work under their zero hours contract. The proposal to ban exclusivity clauses is the first step that the government has taken to restrict the abuse of zero-hours contracts after conducting a consultation on their use.  A further consultation on how to prevent employers from evading the new rules has been announced. The freedom to take up other employment alongside their zero-hours role, will give employees an opportunity to increase their income, and may even lead to them finding an alternative job which guarantees more hours.

So what will these proposals do in practice?  Since the announcement, there has been debate between employment lawyers in the UK, on social media and on blog websites.  There is a concern that employers will continue to punish employees who seek employment elsewhere or who are generally less flexible, by denying them work.

The proposed statutory definition of zero-hours contracts has also attracted criticism.  It defines them as an arrangement where an employee’s work is dependent on the employer making work available, and where there is no obligation on the employer to do so. It therefore includes contracts which don’t guarantee work, albeit do guarantee pay. This definition  may lead to unintended consequences. For instance, it has been suggested that football contracts may be classed as zero-hours contracts, as they do not guarantee footballers work i.e. match time.  Yet they do guarantee a salary. If this reasoning were to be followed, exclusivity clauses in football contracts would arguably be banned, and a footballer would be free to play for another team.  In a similar vein, a business consultant would be able to work for a competitor.  These are just two initial examples from commentators that highlight the problems that may occur if the changes are legislated for in their current form.  Evidently, these are not the type of contracts that need tackled given that income to employees under them is guaranteed.

It is argued that further steps should be taken to fully address the pitfalls of zero-hours contracts. One view is that minimum hours per week should be incorporated into all contracts to give employees income certainty.  The government have also promised to work with business representatives, unions and stakeholders with a view to developing a Code of Practice on the use of zero-hours contracts. The big challenge for the government will be working out the best way to implement legislation which prevents the abuse of zero-hours contracts whilst at the same time preserving the advantages to both employers and employees of being able to contract on that basis. We will watch with interest as the fate of the proposals unfold.

Laura Anderson
Trainee Solicitor

LChalmers