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Zero hours contracts: Your views

The issue of the use and potential abuse of Zero hours contracts has frequently made the headlines over the past few months.

Zero hours contracts: Your views.

The issue of the use and potential abuse of Zero hours contracts has frequently made the headlines over the past few months.

When the Government recently launched a public consultation on this legal and political hot-topic we asked you to share your views with us. We received over 130 responses to our questionnaire, a clear indication that many of you feel strongly about these controversial contracts and their use.

Such concern is clearly widespread with the Government’s national consultation receiving over 30,000 separate responses from individuals, employers, Trade Unions and other key stakeholders. 

We submitted a combined response to the Government on behalf of all of you who responded to us. Your responses were of course treated with complete confidentiality.

The consultation

The consultation identified exclusivity clauses (stating that an employee may not take up with work with any other employer) and a lack of transparency as two key concerns posed by zero hours contracts and asked for views on potential solutions. The questions asked by the Government focussed closely on these issues.

The options proposed by the consultation ranged from maintaining the status quo to potentially banning controversial exclusivity clauses altogether. Statutory Codes of Practice, guidance, model contractual clauses and better information and education about the contracts, were all suggestions put forward for comment.

Despite calls from some Trade Unions, no outright ban on zero-hours contracts was proposed.

What you thought

Exclusivity

On the issue of exclusivity, the majority of you oppose the use of exclusivity clauses in zero-hours contracts. Over 40 of you strongly felt that it was not justifiable to use such a clause in any circumstances.

95% of you stated that you had never offered a job on a zero-hours contract basis that contained an exclusivity clause (although many of you successfully offer zero-hours contracts on a non-exclusive basis).

However, it was broadly recognised that there might be some limited circumstances in which the use of an exclusivity clause might be justified, for example where the employee would have access to confidential or commercially sensitive information (for example senior employees engaged on a consultancy arrangement). Other respondents to our questionnaire expressed the view that it might be reasonable to insist on exclusivity, but only for a limited period or at certain peak times of year. For example, retail staff could perhaps reasonably be required to be exclusively available to one employer over the Christmas period.

You also pointed out that exclusivity might be a useful tool where hours of work cannot be guaranteed where continuity is required, for example where one individual is required to undertake project work. A number of you pointed out that the use of agency staff as an alternative to an ‘exclusive’ zero hours contract could not guarantee continuity in this way resulting in increased training costs and inefficiency.

68% of you stated that the Government should seek to ban exclusivity clauses in employment contracts with no guarantee of work. This was largely on the basis that such clauses would create a significant imbalance between the employer and worker.

The prevailing view was that an outright ban on exclusivity clauses in these circumstances would not have a significant impact on job creation. Rather you felt that a ban on such clauses would prompt recruiting employers to carefully consider business need and explore options other than zero-hours contracts. Many of you felt that this might actually promote other flexible options in positive ways for employers and staff. However, it is important to note that opinion was divided on this point. A number of you suggested that a ban on exclusivity might cause businesses to turn to agency workers, depriving staff on zero-hours contracts of the possibility that a permanent or longer term contract might be offered in due course.

Further guidance on exclusivity

92% stated that you would welcome more focussed guidance on the use of exclusivity clauses.

You stated that you would like to see guidance on situations where it might be appropriate to use an exclusivity clause, entitlement of zero hours staff to holiday sick pay and other benefits, and clarity on when and how a zero-hours contract might be brought to an end.

You also suggested that ‘plain English’ guidance specifically intended to inform individual employees of their rights would be very useful.

Transparency

You felt that better guidance on zero hours contracts in general would empower employees and enable employers to develop best practice. There was a strong prevailing view that you would like to see some definitive ‘back to basics’ advice clearly explaining the nature of zero-hours contracts and their typical content to serve as a benchmark for employers and individuals.

You were concerned that any new guidance or Code of Practice should simplify and clarify rather than adding extra layers of complexity in this already difficult area, a view we stressed to the Government in our combined response.

You felt that a Code of Practice produced by ACAS would be perceived as the most valuable. On balance you expressed a preference for non-statutory best-practice guidance rather than a statutory Code of Practice that might create additional ‘trip-wires’ for employers.

You told us that you made every effort to provide zero hours employees with as much information as possible as early as possible about their rights and terms. However, many of you cited poor understanding of working arrangements amongst staff as an indication that you could do more.

The majority of you stated you clearly explain when advertising a zero hours position that there is no guarantee of minimum hours of work. This is then reiterated at interview and when a formal offer of employment is made. Those of you who do not highlight the zero hours nature of a position at advertising stage did so at interview or during initial discussions with the employee.

What did other key players say?

Since the Government consultation closed, both ACAS and the CIPD have published their full responses online.

ACAS has suggested that exclusivity clauses in zero hours contracts are likely to be detrimental to relations between employer and employee. It calls for new guidance on zero hours contracts to ensure that employers and employees understand the working arrangements in place.

The CIPD has taken this a step further and recommended that the Government bans exclusivity clauses in zero-hours contracts unless employers can demonstrate a ‘compelling business reason’ for their use.

The Employment Lawyers Association (an organisation in which some of our team are heavily involved) have a dedicated working party looking at this issue. They suggested that the Government take things back to basics with a ‘clear definition’ of zero-hours contracts as commercial practice is so varied and the term means ‘different things to different people’.

What next?

Given the scale of the response to the consultation it may take many months for the Government to consolidate all of the information received and publish its outcome report. As the consultation process is usually the precursor to policy change it is therefore unlikely to see any new law in this area imminently, despite a clamour for action in the press.

However, given that all of the political parties seem committed to taking action of some sort over zero-hours contracts this issue looks set to stay firmly in the spotlight. Question marks hang over the speed and scale of change.

In the meantime, your responses to our questionnaire illustrate that those of you who use zero-hours contracts are already working hard to make sure that they are necessary and appropriate in the circumstances and are fully and properly explained to employees.

If you would like to review the transparency of your zero-hours arrangements or the terms and consequences of the contracts you use please speak to your usual Weightmans contact or Phil Allen in our Manchester Office phil.allen@weightmans.com