Zero Hours Contracts; A Developing Story

By | 21 February 2014

By Penny Schenk

Zero hours  employment contracts (or ZHC’s) have been widely discussed recently. This post seeks to (very briefly) define a “zero hours contract” and highlight the current Government consultation on the subject which ends on March 13.

 Attribution 2.0 Generic (CC BY 2.0) Kevan Davis

Attribution 2.0 Generic (CC BY 2.0) Kevan Davis

First of all, what constitutes a ‘zero hours contract’? I was rather surprised to learn from the consultation that there is no legal definition of a zero hours contract in domestic law. Rather, it’s a term that encompasses a variety of different employment contracts. Data from the Office of National Statistics shows that the use of such contracts has increased in the past 5 years, and that there are currently about 250,000 such contracts in effect in the UK at present.

The Department of Business and Industry consultation defines a zero hours contract this way:

In general terms a zero hours contract is an employment contract in which the employer does not guarantee the individual any work, and the individual is not obliged to accept any work offered.

The consultation also contains a useful chart outlining the employment rights one has, depending on whether one is considered an employee, employee shareholder, worker, or is self-employed. Some have incorrrectly assumed that a zero hours contract neccessarily means sacrificing these rights; this is not the case.

The consultation ocncentrates on two controversial aspects of zero hours contracts:

1. Exclusivity

Specifically, employer exclusivity clauses that can prevent workers from seeking additional employment even when the employer with which they have a zero hours contract has no work to offer them.

2. Transparency

Or, how to address a widespread lack of understanding about the nature of zero hours contracts.

The Government is seeking input on various options it is proposing in relation to zero hours contracts, and those who wish to participate can do so here.

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