Consultation on zero hours contracts

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Following much controversy about the use and/or abuse of zero hours contracts, the Government has published a Consultation aiming to ensure such contracts are used fairly.

Zero hours contracts impose terms which mean that workers are not guaranteed a number of hours of work, and are only paid for the hours that they do work. This can be very important for some businesses, particularly those that experience seasonal demand and peak periods, but which cannot justify the same number of workers all year round.

It can also be good for workers who want the flexibility to pick and choose their hours, and be able to turn down work when it is not convenient. However a long-running debate has highlighted the potential for abuse of workers who do not want be on such contracts. They may be stuck with the hours they are given and some employers may use it as a means of preventing the individual from gaining employment rights.

Many employers assume that workers on zero hours contracts will not have full employment rights. In fact those engaged on zero hours contracts could be employees, and can sometimes establish continuity of employment even if they are only deemed to be 'employees' for the duration of each individual engagement. Whether or not they are employees will depend not only on the wording of their contract but on the way it is understood and operated in practice.

The Government's Consultation asks whether employers should be allowed to specify that zero hours workers are to work exclusively for them even if they are not being offered any hours. Although in some cases it may be justifiable, this will be relatively rare. Options put forward are either a ban on such exclusivity clauses, guidance or a Code of Practice on fair use of such clauses, or relying on the current law to challenge them.

The Consultation also proposes to increase transparency over zero hours contracts by increasing the guidance and information available on them, creating a Code of Practice on zero hours contracts generally (which would include how to advertise and explain the meaning of zero hours contracts to workers), and looking at whether the Government should produce model contracts and clauses.

The Consultation will run until 13 March 2014.