On 17th July, at the State Opening of Parliament, the King’s Speech outlined areas of law that the new government are aiming to tackle within the first 100 days of its administration. While various topics were discussed, a key takeaway from the speech was Labour’s plan to ban “exploitative” zero hour contracts.
What are zero hour contracts and what is the current law on them?
Zero hour contracts are a type of casual working arrangement where the worker is employed to do work on the basis of the work available and is defined in s153 of the Small Business, Enterprise and Employment Act 2015. As the name suggests, there are no defined amount of working hours in part of this agreement. With around one million people working zero hour contract, this type of contract is quite popular with young workers and parents, as it can provide them with flexibility in choosing shifts around the obligations of their personal life.
On paper, the flexibility of zero hour contracts appeal to both employers and workers. For employers, it allows them to have workers available based on the amount of demand and work at the time – this can be especially applicable in seasonal jobs. For workers it means that they can be selective about the work that is offered to them and choose how much work they want to take on.
Zero hour contracts also have the ability for the individual to be defined either as a worker or as an employee, and this will impact the type of rights available to them. Different rights are available depending on how they are defined. Employees have more employment rights provided to them, such as redundancy payments, while workers have more limited rights. While the individual’s status will be defined in the contract, case law suggests that the conduct of the employer and the individual and it is often that while defined in the contract, the actual working relationship may suggest a different status.
Issues with Zero Hour Contracts
The issues with zero hour contracts unsurprisingly arise due to the amount of flexibility that they provide – in fact it is often said that the flexibility aspect is more beneficial towards the employers instead of the employee or worker.
Employers are able to cancel shifts last minute as is convenient for them, but often they are also not required to provide compensation to their staff. This means that for those who were relying on the shift for wages, they are suddenly left with no work and no alternative.
Furthermore, while in contracts it may seem that the worker or employee is able to turn down shifts as according to their discretion, in practice individuals have found that this can lead to employers offering less shifts.
Lastly, it was also found that once a pattern was established, the hours were not that varied compared to usual part time work.
What has Labour Said about Zero Hour Contracts?
Based off the King’s Speech, it is hard to speculate what precisely the new Government is planning in regards to the future of zero hour contracts. It is said that they will be working towards banning exploitative zero hour contracts.
It is still not entirely clear whether the concept of zero hour contracts will be scrapped completely, or if the Government will make zero hour contracts stricter to ensure that they are no longer exploitative towards the employee or worker, by providing the contracts that accurately reflect the regular amount of hours worked or by providing compensation for last minute cancellations of shifts.
We hope that the new rules regarding zero hour contracts will provide further stability and security for workers and employees moving forward.
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