More on Zero Hours: new anti-avoidance measures revealed
Author: Michael Briggs
Applies to: England and Wales
The government has confirmed the measures it intends to take to tackle any attempts by employers to flout the forthcoming ban on exclusivity clauses in zero-hours contracts.
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 standby; ensuring they are available for work when required, thus preventing them from working for others, but with no guarantee they will actually be offered work. Such terms in zero hours contracts are known as exclusivity clauses.
We looked at the rising use of zero hours contracts in a previous article on our website.
Over recent years politicians and trade unions have focused on employers' use of zero-hours contracts and, in particular the use of exclusivity clauses within them. Critics claim that zero-hours contracts leave workers with little stability or security, and as such, workers were open to exploitation. As a result, in June 2014 the government announced that it would consult on measures to tackle any attempted avoidance of the proposed exclusivity ban within zero-hours contracts, noting that employers might try to circumvent it, for example, by introducing one-hour contracts. That consultation concluded in November 2014, and the government's response has now been published.
The suggested 'anti-avoidance' measures include new legislation to protect zero-hours workers, and those who work under a 'prescribed contract', from suffering a detriment on the grounds that they have done work or performed services under another contract or arrangement. Where such workers do suffer a detriment they will be able to seek redress though an employment tribunal. Where a complaint is upheld, the employment tribunal may award compensation. Additionally, employers could be subject to civil penalties under the Employment Tribunals Act 1996 in circumstances where the worker's rights have been breached and there are aggravating features.
Under the proposed legislation a 'prescribed contract' would be defined as a contract that guarantees the worker less than a certain level of weekly income. The minimum income would be defined by reference to an agreed number of hours multiplied by the minimum wage. Any exclusivity clause within a 'prescribed contract' would be unenforceable in the same way as an exclusivity clause in a zero-hours contract. However, those individuals who receive a basic pay not below £20 for each hour worked under the contract will be exempted from the prohibition on exclusivity clauses.
The future of zero-hours contracts
While critics have raised their concern on the use of zero-hours contracts, the government's response to the consultation does suggest that the majority of zero-hours contracts have been used responsibly in a range of sectors for many years and not all zero hours workers feel exploited. There is evidence that some groups such as students and older people value the freedom of zero hours work. As such, their continued responsible and lawful use will allow employers to remain flexible with the ability to respond to fluctuations in demand.
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.