News and Updates

Zero Hours Contracts: Exploitation or good business sense?

Many of us will have noticed the current controversy in the media relating to ‘zero-hours’ contracts. Zero-hours contracts are increasingly being used by employers, particularly in the difficult current market conditions, as a means of employing individuals for short-term needs.  Unite, the union, estimates that as many as 5.5 million individuals are employed on this basis.

Zero hours contracts allow employers to take on staff who, under these arrangements, agree to be available for work as and when required whilst having no guaranteed hours or times of work.  However, if work is offered to the worker, under the contract, he or she is usually obligated to perform it.  This effectively means employers are provided with a pool of workers without being obliged to offer them work.

This type of contracts has been criticised for various reasons. It is argued that they cause exploitation of the worker as the worker has no guaranteed income, little in the way of job security and may not be provided with appropriate statutory benefits such as sick pay or holiday entitlement and pay.  However, The View questions whether the problem here is with zero hours contracts themselves or with the way in which employers use them. 

If used properly and fairly, in circumstances in which zero hours contracts are appropriate, they can offer employers the flexibility and option to employ staff in accordance with the ebb and flow that comes with a demand for service and workflow and can work effectively in industries such the retail, hospitality and leisure sectors. They can also provide work that would not otherwise be available to those individuals looking for part-time work or, for example, students who are looking to balance their studying commitments.

In our opinion, exploitation arises when zero hours contracts are used inappropriately, for example, when a contract for services or a casual worker contract or a part time contract of employment would be the fairer option.  Exploitation also arises when the employer denies such workers their statutory benefits in any event, regardless of the form of written contract used to engage them.

Much has been made of the need to regulate the use of zero-hour’s contracts, but The View believes that to impose an outright ban (as Ed Miliband has recently hinted) would be counterproductive.  Rather, the government should heed the recent advice of the Recruitment and Employment Confederation who have suggested drawing up a voluntary code of good practice for businesses to adhere to in their application of zero-hours contracts. Employers should remain aware of their obligations under Health and Safety legislation, National Minimum Wage Regulations, the Working Time Regulations and any other statutory rights bestowed on workers and employees and ensure the terms of any such contracts are set out clearly

The View supports the recent decision of the Government to review the use of these contracts and we will ensure we update our readers of any further developments in the future. Watch this space…

Should you wish to discuss any of the matters referred to within the above article, please do not hesitate to contact Sabina Tariq, Associate Solicitor, on 020 7925 8080 or by email at Sabina@spencer-wyatt.com.

 

+44 (0)20 7925 8080 info@spencer-wyatt.com