Zero hours contracts - where are we now?

What is a zero hours contract?

• The crucial aspect of a zero hours contract is that the employer does not guarantee to provide the worker with any work and pays the worker only for the hours they actually work.
• Practice varies but often a zero hours contract will require the worker to accept work when it is offered.
• Zero hours contracts are typically used where the demand for work is unpredictable.
• Individuals working under zero hours contracts can be either employees or workers, depending on the terms of the contract and what happens in practice.

The Office of National Statistics reported that 744,000 individuals were working under zero hours contracts between April and June 2015, an increase of 19% from the previous year.

Are there any restrictions on using zero hours contracts?

On 26 May 2015, a ban on the use of exclusivity clauses in zero hours contracts was introduced. This means that a zero hours contract cannot contain a clause which prevents the worker / employee from working elsewhere. Any exclusivity clauses which do exist can be ignored.

The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 came into force yesterday. The Regulations provide a remedy for zero hours workers against employers who include exclusivity clauses in their contracts of employment. The Regulations give zero hours employees the right not to be unfairly dismissed, and zero hours employees and workers the right to not be subjected to a detriment, for failing to comply with an exclusivity clause. The right not to be unfairly dismissed is not subject to the usual two year qualifying period of employment.

The draft Regulations had provided that the ban on exclusivity clauses would not apply if the individual was guaranteed an income of at least £20 an hour. It also stated that the ban would apply to low income workers as well as zero hours workers. These provisions do not appear in the final version of the Regulations and no information has been given for the reasons for the change in policy. The government has confirmed that it has no plans for more legislation on zero hours contracts.

Please get in touch with your usual Brodies' contact if you would like to discuss using zero hours contracts.