What is a ‘zero-hour contract’?
It is a contract of employment or a worker’s contract under which the employee is employed to provide their labour – but it is conditional on the employer making the work available to the employee. Consequently there is no certainty that any work will be made available to the employee. Such contracts often contained exclusivity clauses which meant the employee was tied to the employer, even if little or no work was available.
The Media has made great play of zero hour contracts and there have been various views expressed in favour and against their use:
- Because they can organise the cover of busy periods and not pay wages for staff in quiet times.
- Staff have liked them as they can choose as and when they work.
- Staff have disliked them because the fact that there is no guarantee of work means they cannot budget their finances, they cannot obtain credit easily and certainly no mortgage
- Employers have asked for the same basis as a full employment contract – such as restrictive covenants and the fact that that an employee cannot work elsewhere in a similar organisation, but without the need to actually offer that employee work.
The Government has introduced a new s.27B into the Employment Rights Act 1996 – which bans exclusivity clauses in zero hour contracts.
There is also a consultation process underway to seek ways in which to prevent employers circumventing the ban, and potential penalties for trying to do so – which continues until 3 November 2014.