It was announced yesterday by Vince Cable, Business Secretary, that there is to be a ban on employers from preventing those working on zero hours contracts from working for other employers. The ban will be part of the Small Business, Enterprise and Employment Bill, which was introduced to Parliament on Wednesday 25 June 2014. There has been considerable pressure in the UK from Trade Unions to ban zero hours contracts altogether due to the number of employers taking advantage of their use. However, the Government has taken the view that they do serve a valuable place in the labour market.
There are an estimated 125,000 people working on zero hours contracts who are restricted by their contracts from finding additional hours with other employers. It has been reported that 83% of responses to the Government Consultation were in favour of banning such clauses. For many individuals, such as those with caring responsibilities, students and older workers, the flexibility of zero hours contracts suit their lifestyle. However, many workers are losing out on basic employment rights as a result of their employer taking advantage of the unrestricted use of zero hours contracts. These workers tend to be low paid and work within the retail and hospitality industries. Many have no guaranteed hours and are forced to wait for their employer to get in touch at short notice to advise them that work is available. There is no entitlement to holiday pay and little recourse against their employer if they are no longer needed. Many workers can go weeks without their employer giving them any work and there is no obligation to pay them during this period, however, in the event that the individual is unable to take any shifts offered, they will normally run the risk of not being offered any further work.
For some, the exclusivity ban is not enough and there are still calls to ban zero hours contracts altogether or at least introduce a requirement for a minimum number of weekly hours. However, the view has been taken that there is a need for flexibility in order to keep unemployment levels down and so no further restrictions are being introduced at this stage.
In order to prevent further abuse of zero hours contracts, there will be another consultation on how to prevent employers attempting to get around the exclusivity ban and the Government intends to produce a code of practice on the fair use of zero hours contracts by the end of the year.
If you are considering introducing zero hours contracts to your business or think that you may need a review of your current contractual model, please get in touch.