Zero Hours Contracts: No Code of Practice, but guidance at least
Author: Michael Briggs
Applies to: England, Wales and Scotland
Continued consultation in the area of zero-hours contracts (ZHCs) has led to the Department for Business, Innovation and Skills (BIS) producing a guidance document for employers.
In our September update we advised that draft regulations had been put before Parliament for their consideration in the developing area of ZHCs. As well as the fine detail regarding the consequences of employers imposing or otherwise using exclusivity clauses within ZHCs (including the right for workers to pursue claims in the Employment Tribunal), the draft regulations suggested the need to improve information, advice and guidance available to both employers and workers. There was also an indication earlier this year that the continued consultation could result in some form of Code of Practice being produced in relation to the use of ZHCs generally.
BIS has now produced Guidance for employers. This sets out what it considers to be best practice in this area and explains to employers:
- What ZHCs are;
- The employment rights available to those workers employed on a ZHC;
- How ZHCs can be used appropriately, and inappropriately, in practice;
- What alternatives are available to employers when they are considering the use of ZHCs in their business; and
- That exclusivity clauses are prohibited, meaning that employers must allow workers to look for work elsewhere or accept work from another employer.
Best practice suggests that contracts used for ZHC purposes should be clear and transparent; to ensure that individual workers understand their employment rights and what the implications of entering such contracts are. The government also encourages employers to plan their use and give as much notice as possible when offering work to zero-hours workers, as well as being transparent on how such work will be offered.
As well as the government's best practice guidance, to further prevent any risk of damage to business reputation as a result of the use of ZHCs, employers should also consider:
- Engaging individuals on a permanent basis rather than as a zero-hours worker;
- Not creating a bigger pool of zero-hours workers than is necessary;
- Making sure ZHCs go no further than is commercially necessary e.g. consider whether it is strictly necessary that zero-hours workers are always available for work;
- Ensuring compliance with National Minimum Wage and Working Time legislation; and
- Creating a fair system of how work is offered to zero-hours workers.
Overall, the government aims to eliminate all abuse associated with ZHCs. Therefore continued responsible and lawful use of ZHCs will allow employers to remain flexible. Research does suggest that ZHCs do remain a preferred option for the employment of many people, especially when trying to balance work, education and family commitments.
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.