Labour & European Law Review Weekly Issue 443 28 October 2015
The government has recently published draft regulations preventing employers from enforcing exclusivity clauses in zero hours contracts.
The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 will amend the Employment Rights Act 1996 so that a provision in a zero hours contract which prohibits the worker from doing work under any other arrangement will be unenforceable.
Regulation 2 states that individuals working under a zero hours contract will have the right to bring a claim in an employment tribunal for unfair dismissal or a claim that they have been subjected to a detriment by their employer. However, regulations preventing employers from circumventing the ban on exclusivity clauses have not yet been brought into force.
As the regulations are in draft form, they still need the approval of each House of Parliament.
The government last week also published guidance for employers on zero hours contracts setting out the rights of workers to the NMW, paid annual leave, rest breaks and protection from discrimination.
The guidance highlights when zero hours contracts can be used - for instance, when work demands are irregular or when the employer does not have a constant demand for staff. It points out that they also suit some employees who want a level of flexibility allowing them to work around other commitments such as study or childcare.
Equally, however, the guidance makes clear when they should not be used. In particular, the government states they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable. It also points out that zero hours contracts do not allow employers to avoid their responsibilities. As the guidance states: “All staff, regardless of their contract, are entitled to employment rights and should be treated fairly and within the law”.
Iain Birrell of Thompsons Solicitors commented “Research suggests that 24% of the 744,000 UK workers on a zero hours contract have some sort of exclusivity requirement and measures to tackle this abuse are to be welcomed. However, is this another example of the Emperor’s new clothes? The right requires a proven link between dismissal and exclusivity, but those on zero hours contracts have no rights to a reason for their dismissal, and true reasons are very easily masked. Proving the link will be a particular challenge. There is also still the problem that few will be prepared to pay the swingeing Employment Tribunal fees and jeopardise possible future work to boot. And all that before you reach the problem of how to show financial loss since the concept assumes a degree of stability and longevity that employers will say zero hours contracts inherently don’t have.
As for the new guidance we will have to see what effect, if any, that has on the much lauded ‘flexible’ employment market. The simple fact is that zero hours contracts do in fact allow employers to avoid their responsibilities – that is a key reason why so many exist. It also explains why 85% of those contracts have lasted for 6 months or more, why 65% have lasted for 2 years or more and why a whopping 21% have lasted 10 years or more.”
To access the draft regulations, go to: http://www.legislation.gov.uk/ukdsi/2015/9780111139950