The government is consulting on how to make its reforms watertight
A mix of political and media scrutiny has kept zero-hours contracts firmly in the spotlight, largely due to an overall lack of transparency associated with them and the potentially unfair limitations they impose on workers. Now, following feedback from an initial consultation, the government has launched a further consultation, seeking views on how to stop employers potentially sidestepping a ban on exclusivity clauses. The consultation closes on 3 November 2014.
According to figures released by the Office for National Statistics in April this year, there were 1.4 million jobs offered on zero-hours contracts and more than half a million people employed on them, mostly in large companies in the tourism, catering and food sectors. There is clearly a valid argument in favour of such contracts, as they constitute a means for catering to a more flexible, demand-based need for labour, and the government has indicated that it believes they have a place in a post-recession labour market. But there have been calls from trade unions to ban the use of zero-hours contracts altogether, because of the potential for unscrupulous employers to abuse the flexibility such contracts provide.
Reform
The main issue is exclusivity clauses in zero hours contracts that effectively tie a worker to one employer even when no work is available. A staggering 83 per cent of the 36,000 responses to the government’s initial consultation on zero hours in December 2013 were in favour of banning these clauses. The government has responded by including a provision in the Small Business, Enterprise and Employment Bill that will render these clauses unenforceable, and this has been widely accepted as a necessary modification.
However, it has been suggested that employers may simply find legal ways of sidestepping the exclusivity clause ban, for example, by offering one-hour fixed contracts instead. The current consultation asks how such avoidance could be dealt with; whether there should be consequences for employers that attempt to circumvent a ban on exclusivity clauses and, if so, what those consequences should be.
At this stage it is unclear what measures the government will introduce to prevent employers sidestepping the ban on exclusivity clauses, and what guidance on implementation will be passed on to employers via an accompanying code of conduct. However, it would be fair to assume that any clause which restricts an individual’s ability to pursue additional employment will be deemed to be unenforceable. The code of conduct should provide guidance on areas such as the rights and responsibilities of the individual and the employer, how to calculate accrued benefits such as annual leave, best practice in allocation and cancellation of work, and how to promote overall clarity.
Policy
There is still much uncertainty as to how zero-hours contracts will be administered and exactly how the contents of such contracts will be agreed, enforced and, indeed, disputed. The Bill and accompanying code of conduct are expected to become law in early 2015, so now would be an ideal time for employers using zero-hours contracts to review their current processes to ensure they are not imposing any unreasonable exclusivity on their workers and that work is allocated on a fair and transparent basis.
One issue they may wish to consider is confidentiality. Employers who had previously imposed exclusivity clauses on zero-hours workers in order to protect confidential information may want to substitute a specific confidentiality clause in the contract in place of the exclusivity clause, so that they can protect their own business interests without falling foul of future legislation.
Sarah Tahamtani is a partner at law firm Clarion
For more employment law articles, visit HR-inform