This post was contributed by Poppy Pritchard.
The use of zero-hours contracts has attracted much controversy in the UK, after it emerged recently that the number of workers on zero-hours contracts may be up to four times the official figure. These contracts are particularly unpopular with trade unions and the Labour party is calling for them to be banned. The UK Government responded to widespread public concern over the prevalence of zero-hours contracts by launching a review into their use. This review has recently concluded and has identified key areas for concern. The UK Government has since announced that it will be holding a formal consultation into possible changes to employment laws governing zero-hours contracts. It has confirmed that there will not be an outright ban on their use, but we may well see increased protections for those workers tied to a single employer on a zero-hours contract.
Zero-hours contracts are designed for casual workers. The contract operates so that the employer is not required to provide the casual worker with a minimum amount (or indeed any) work and only pays the worker for the work that he/she actually carries out. In turn the worker is required to be available to work as and when the employer needs them.
It is easy to see the advantage of zero-hours contracts from an employer’s perspective as they provide so much flexibility. At a time when the economic climate in the UK is so uncertain many employers are grateful for zero-hours contracts which allow them to pay workers in accordance with demand. They are therefore of particular use to employers who have to deal with fluctuating demand for their services, particularly in the retail and tourism sectors which are notoriously seasonal. This flexibility is equally appealing to certain types of worker who are happy to work as and when they are needed, such as students.
The concern, however, is that these zero-hours contracts are leading to vulnerable members of society being exploited. Workers do not know how many hours they will be required to work week on week and consequently may struggle to balance their outgoing expenses such as rent against their sporadic income. It can be very difficult for those with children to organise child care at the last minute and fluctuating pay makes claiming benefits particularly complicated. Those on zero-hours contracts are usually workers rather than employees. As such they do not enjoy any of the protections that employees benefit from under UK employment law, for example in relation to unfair dismissal, maternity rights and redundancy rights.
In terms of practical advice, employers should note that if there is an obligation on the employer to provide work and an obligation on an employee to accept such work (known as mutuality of obligation) between an employer and their zero-hours contract workers, then these workers may actually be employees and as such have additional employment rights, regardless of what is written in the contract. It is also important to make sure that workers signing up to a zero-hours contract are aware of what it will mean in practice in order to avoid any complaints further down the line. The contracts themselves should be clear and transparent to avoid any confusion. There should also be a fair, i.e. non-discriminatory, system of how work is allocated to workers.