Zero hours contracts on election agenda

25 April 2017

We have yet to see the election manifestos but Jeremy Corbyn has pledged that his party will ban zero hours contracts in the event of a Labour victory.

The use of zero hours contracts has proliferated over the last five years. They are commonly used in the retail, hospitality and social care sectors where demand for work is uncertain and workers may be required at short notice.

Zero hours contracts place no obligation on the employer to provide a minimum number of hours work to the worker and the worker is not under any obligation to accept any work offered to them. However, employers in the past had placed exclusivity clauses in zero hours contracts which prevented workers from working elsewhere even when the employer had no work to offer them. These exclusivity clauses have now been outlawed. If an employer tries to enforce such a clause, the worker can bring a claim against them in the Employment Tribunal.

During any assignment the worker has accepted, they are entitled to the National Minimum Wage, holiday pay and sick pay. A zero hours worker will not normally have the full rights of an employee though (such as the right not to be unfairly dismissed or the right to a statutory redundancy payment). When the worker is not working on an assignment, they are not entitled to any pay from their employer.

While the Labour Party is seeking to ban zero hours contracts, there is a question mark over how this could be implemented.

The government has launched a review into whether employment regulation and practices are keeping pace with the changing world of work. In a recent interview, Matthew Taylor, who is leading the review, indicated that businesses in the future may have to pay a premium above the national minimum wage for staff employed on zero hours contracts where their hours are not agreed in advance. He added that this might discourage employers from pushing the risk of uncertain work periods onto workers. However, he stressed that this was one of a number of possible ideas being considered and that the downside to such a measure would be to complicate the simplicity of the UK’s National Minimum Wage system.

For more information please get in touch with Carolyn Brown, or your usual RSM contact.