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UK – Not all Zero Hours Contracts are bad

08 August 2013

Employment law specialists, Lewis Silkin have provided a more balanced overview on the use of Zero Hours Contracts which have received a lot of negative publicity in the British media this week following the news that a million people may be working under such contracts.

Lewis Silkin point out that these contracts cover a range of different types of employment arrangement, so people are often comparing chalk and cheese.

At one end of the scale, this could be similar to a staff “bank” arrangement, where the hirer can contact anyone in the bank if there is work on offer and those contacted are under no obligation to accept. In these circumstances, minimum employment protections may not apply (for example, there may be no right to paid holiday or sick pay) because the individual does not necessarily have the status of employee or worker due to a lack of “mutuality of obligation”. This arrangement may well suit both sides by offering flexibility.

Another type of arrangement might be an “umbrella” contract, where the contract sets out the terms on which an assignment (if available) might be offered but does not guarantee any minimum assignments. This might be used for highly paid, professional service jobs to deal with fluctuations in demand. Once offered and accepted, an assignment might last for months or even years. The individual would qualify for the minimum protections afforded to “workers” or “employees”, depending on his or her particular status.

Yet another variation on the theme seems quite common in the retail, hospitality and leisure, and care sectors. Here, while individuals might be nominally on Zero Hours Contracts, they are actually working regularly. They might be informed of their hours when the shift rota has been prepared, maybe a week in advance, or they might be “on call” or subject to last minute cancellation. Such contracts might be used to deal with demand issues (such as seasonal variations in the tourist industry). Under these arrangements, it is possible that an employment relationship or “worker” status might be implied if in practice - regardless of the wording of the contract - the employer has an obligation to provide a certain level of work and the individual has an obligation to accept it.

The problem of course is that, in some circumstances, Zero Hours Contracts might be used by unscrupulous employers to try to minimise their obligations to the people who work for them. Such arrangements so have the potential to become exploitative, given the power inequalities inherent in the employment relationship which are more extreme in the case of lower-skilled, lower-paid workers.

Lewis Silkin point out that, given the range of circumstances in which these contracts are used and the variation in their terms, it is difficult to see what regulation could be used to address cases of abuse without impacting on non-abusive arrangements. Business Secretary, Vince Cable, has suggested that the Government might consider legislating to stop employers preventing Zero Hours Contract workers from working for others. Other possible measures might include: regulating the amount of notice required to cancel shifts without pay; giving workers a statutory claim if their hours are reduced for a “capricious” reason (e.g. to bully or punish them); and giving those on zero-hours contracts the same employment protection rights as other “workers”.

As the media continue to name and shame employers for poor practice, Lewis Silkin advises employers’ to consider what “best practice” might mean in this area and seek to adopt it, before they become the centre of the next Twitter storm.

Lews Silkin’s full comments on the matter can be read here

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