Zero Hours – legislation

What does the law say?
What does the law say?

The term 'zero-hours contracts’ is in itself misleading and attempting to pin down exactly what type of contracts are covered can be difficult. The new sections of the Employment Rights Acts 1996 introduced by the Small Business, Enterprise and Employment Act have though attempted to do this and define ‘zero-hours contracts’ as follows:

“a contract of employment or other worker’s contract under which

(a) the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker, and

(b) there is no certainty that any such work or services will be made available to the worker.”

This definition reflects the general understanding that this type of contract covers arrangements between an employer and a worker whereby the employer is not obliged to provide the worker with any minimum hours of work, and the worker is not obliged to accept any hours that are offered. This lack of obligation, typically an essential element of an employment contract, has led to uncertainty and allegations of exploitation, particularly given that many of these contracts have historically tied the individual to the organisation under an ‘exclusivity’ clause. These ‘exclusivity’ clauses have brought particular criticism in relation to zero-hours contracts given that there is no obligation to provide work to individuals but they would be prevented from securing extra work from other businesses as well, thereby potentially making them entirely reliant on one employer.

Workers have the same employment rights as regular staff such as the right to paid holidays, statutory sick pay, the national minimum wage and pay for work-related travel.
Full-time employees and workers are entitled to a statutory minimum of 28 days’ holiday per year.

New Restrictions

The exclusivity clause is now specifically banned by section 27A(2) of the Employment Rights Acts which sets out that any provision of a zero-hours contract which seeks to prevent an individual from performing services under any other contract or arrangement, or from requiring the employer’s consent before doing so, are now unenforceable.

The Government intends to introduce a right for zero-hours workers not to be subjected to a detriment (such as being offered less work or having their contracts terminated) on the grounds that they work or have worked for another organisation. The ban on exclusivity clauses will also be extended to cover all contracts where the individual is not guaranteed a certain level of weekly income.

Those individuals who have suffered a detriment on the grounds that they have attempted to work for other organisations will be able to bring a claim on this basis to an Employment Tribunal in a similar way as they could had they been subject to unlawful discrimination.

What now?

Given that the latest figures from the Office for National Statistics indicate that up to 1.8 million workers are now employed under zero-hours arrangements, the provisions brought in by the Small Business and Enterprise Act could have a significant impact on businesses which rely heavily on zero- hours staff. Although the anti-avoidance measures in relation to exclusivity clauses have not yet come into force, the Government has committed to introducing them and they are likely to come into effect later this year. In light of these provisions, businesses whose zero-hours contracts contain exclusivity clauses would be recommended to amend them now to bring the contracts in line with the new legislation and to ensure that they do not disadvantage any of their zero-hours staff who work for other organisations too.