Zero-hours contracts – latest guide for employers
What are zero-hours contracts?
A zero-hours contract is one used for casual working, under which the employer does not guarantee to provide the worker with any work and pays the worker only for work actually carried out. The worker is expected to be available for work when or if called on by the employer.
Zero hours contracts are not illegal. If they are freely entered into, a zero-hours contract is a legitimate form of contract between individual and employer. Zero-hours contracts can be used by employers to provide a flexible workforce to meet a temporary or changeable need for Staff. Examples include a need for workers to cover:
– unexpected or last-minute events (e.g a restaurant needs extra staff to cater for a wedding party that had their original venue cancel on them at the last minute)
– temporary staff shortages (e.g an office loses an essential specialist worker for a few weeks due to bereavement)
– on-call/bank work (e.g one of the clients of a care-worker company requires extra care for a short period of time)
What does “Exclusivity” in Zero-Hours contracts mean?
An exclusivity clause in a zero hours contract means that the employer can prevent the individual from working for someone else, even though the employer does not guarantee a number of hours of work.
Are Exclusivity clauses in Zero Hours Contracts legal?
No, Exclusivity clauses in Zero-hours contracts are no longer legal.
Exclusivity terms in zero-hours contracts were banned on 14 December 2015 and these new regulations came into force on 11 January 2016.
Employees bringing an unfair dismissal on these grounds will not need to show they have the two year qualifying period of employment.
According to the most recent research and stats from the Office of National Statistics, there are certain industry sectors where Zero-Hours contracts are particularly common, the breakdown looks like this:
How exclusivity clauses in Zero hours contracts came to be banned, the background.
On 25 June 2014, the government published its response to the consultation on zero -hours contracts. Given the support of an overwhelming majority of respondents (83%), the government decided to ban exclusivity clauses in contracts which do not guarantee hours of work. The government expects the ban to benefit 125,000 zero hours contract workers estimated to be tied to an exclusivity clause. As already stated, the new regulations banning exclusivity terms in zero hours contracts came into force in January 2016.
Remember, Zero-hours contracts in themselves are not illegal.
Proposed codes of practice for zero-hours contracts
The government has also announced that business representatives and unions should work together to develop sector-specific codes of practice to help guide the fair use of zero hours contracts. However, it is not clear how and when these codes of practices will be developed. The codes are expected to cover:
- When zero hours contracts should be used and how to identify them to job applicants and workers.
- Rights and responsibilities of the individual and the employer. This will include how to calculate accrued benefits such as annual leave.
- Allocating work and notice of hours of work or cancellation of work.
Acas has stated that it is keen to engage with the government on how best to provide additional support in this area.
This is a hot topic for UK businesses and will continue to be so into next year. If you are using or are considering using Zero-Hours contracts going-forward, contact me at Abigail.Oprey@thelegalpartners.com to ensure that your company is fully protected from the legal, discrimination and PR risks involved.
For more information or queries about issues discussed in this article, please contact Abigail Oprey by email. To speak directly with Abigail or any other of The Legal Partners team of specialist business and HR lawyers based at our Richmond UK office, or our partner lawyers in Singapore or Guanzhou, please call +44 203 755 5288
This article explains the main legal issues and common situations to consider. It is not a substitute for legal advice. Please get in contact to discuss your particular issue or queries.