Business Law: Richard Wood on the use and abuse of ‘zero hour’ contracts

Richard Wood of Employment Advocacy Solutions.

Richard Wood of Employment Advocacy Solutions. - Credit: Archant

Proper protection is key if workers are not to be left vulnerable to some of the alleged misuses of ‘zero hour’ contracts.

According to figures from the Office for National Statistics, there are about 1.4 million ‘zero hour’ contracts, making it a significant presence on the employment law landscape. The concept strikes at the heart of what has traditionally defined the nature of an employment contract, namely an obligation upon the employer to offer work. There is no doubt the flexibility of ‘zero hours’ contracts suits many employees. But there are others significantly prejudiced by such a working relationship. Stories filter through of claimants’ work related social security benefits being refused because they have turned down ‘zero hour’ opportunities. Perhaps it is time for Parliament to look at the broad principles and impose restrictions where protection is required. The employer’s bargaining power within such a contract is significantly greater than that of the employee. The employer is free to offer work or not, but the employee cannot expect paid employment (but realistically has to do it when offered, or is unlikely to be asked again).

Of course, the image of a cold and uncaring employer, and abused employee is simplistic. But it is difficult to see how the inherent imbalance in these contracts strikes a fair balance. At least under those ‘self-employed’ contracts that ‘zero hour’ contracts seem to have replaced, both the firm and individual could refuse to offer or perform particular work. Now, with 583,000 workers on these types of contracts, steps should be made to enshrine protection for workers into employment law legislation.

Government will need to look at how employees can be assured a minimal level of financial stability. There are concerns provisions relating to working time are being circumvented using ‘zero hour’ contracts.

Although sick pay need not be paid, there is still a requirement to provide paid leave. There is also the danger these contracts will be used as management tools, with more hours being given to favoured employees. Tribunals will have to be on their guard for discrimination concealed by way of the allocation of working opportunities under ‘zero hour’ arrangements.

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However, employers and staff who value the flexibility of these contracts need not fear completely. There seems little likelihood of ‘zero hour’ contracts being banned.

: : Richard Wood is a barrister specialising in employment law with Employment Advocacy Solutions.

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