The use of zero-hours contracts continues to rise

The use of zero-hours contracts continues to rise

Published:

Author: Michael Briggs

Applies to: England, Wales and Scotland

Zero-hours contracts continue to be used frequently by employers, according to official records indicating a 19% increase since 2014.

Background

The Office for National Statistics (ONS) has reported that the number of workers engaged on zero-hours contracts has risen by almost a fifth from this time last year. The ONS figures state that the number of workers engaged on such contracts has risen to 744,000, which represents 2.4% of the total UK workforce.

As we advised previously, the term 'zero-hours' indicates a contract for casual work under which the employer is not obliged to provide a minimum (or any) amount of work, and hence pay, to the worker. In essence, zero-hours contracts allow employers to put workers 'on-call' permanently; ensuring they are available for work when required but with no obligation on the employer to actually offer work.

The increased use of zero-hours contracts continues to raise concerns that some employers may use this form of arrangement to avoid typical employer / employee provisions relating to pay and working conditions. Critics believe that their use leads to insecurity of work, with forty percent of zero-hours contract workers wanting to work more hours. It is also believed that the introduction of the National Living Wage in April 2016 (and continued increases to the National Minimum Wage in October 2015) will only encourage employers to continue to use zero-hours contracts to give them full control over labour costs. Supporters of zero-hours contracts maintain that they provide flexibility for both the employer and the worker which is necessary for a stable economy; providing opportunities for the employment of students, single parents and many more.

The government has however introduced anti-avoidance measures to protect zero-hours workers in the last year. Since 26 May 2015, exclusivity clauses in zero-hours contracts have been banned, and are deemed unenforceable should they still exist. Since that date, the Secretary of State has also had the power to introduce further regulations to ensure that zero-hours workers are not restricted from working for another employer. Draft regulations following continued consultation in this area have been put before forward for Parliament's consideration, and suggest the possibility of:

  • Zero-hours contract workers having a right of redress in the Employment Tribunal if they were subjected to a detriment as a result of working for another employer, with compensation being the appropriate award for a successful claim
  • Where employers flout the ban on the use of exclusivity clauses, they may be required to pay a financial penalty, to be determined by the Employment Tribunal
  • The need to improve information, advice and guidance to both employers and workers in relation to zero-hours contracts generally, indicating the possibility of some form of Code of Practice in the future.

Overall, the government aims to eliminate all abuse associated with zero-hours contracts. In the meantime, continued responsible and lawful use of zero-hours contracts will allow employers to remain flexible, and we await further development in this area.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the Author

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Michael Briggs

Senior Associate

03700 86 5066

Michael is an experienced employment lawyer who provides practical, commercial and results-driven advice to a wide range of clients in respect of disciplinary matters, redundancy & reorganisation, absence and performance issues, employment contracts & handbooks and executive appointment & exits. Michael also defends employment tribunal claims.

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