The hospitality industry relies heavily on workers employed under zero hours contracts to meet the peaks and troughs of demand. ‘Zero hours’ is a colloquial term used to describe an arrangement under which an individual is not guaranteed regular hours and is only paid for the work carried out – for example in the case of waiting or bar staff, called in to fill gaps in the rota in a pub or restaurant.
Following considerable debate across the political spectrum during 2013, which highlighted some of the problems arising from zero hours contracts, the Government launched its consultation on these working arrangements on 19 December 2013.
With major industries such as the hospitality sector heavily relying on these contracts to deal with fluctuating demand, the Government would face considerable criticism if it chose to ban them outright. Indeed, introducing new legislation does not feature among the consultation’s options, save for the possibility of banning exclusivity clauses, and the Government says it is seeking to “maximise the opportunities of zero hours contracts while minimising abuse and setting out core standards that protect individuals”.
The consultation explores two major concerns about the use of this type of contract:
Exclusivity clauses
Such clauses may prevent a zero hours worker from working for another employer while engaged under a zero hours contract. The consultation says that although some exclusivity clauses may be justifiable (such as to protect confidential commercial information), “there is not always a clear or obvious reason why this should be part of the employment contract“. A key consideration is therefore how much individuals feel informed and able to withhold their agreement to any such clause.
The consultation invites views on some possible options:
- Legislation to ban the use of exclusivity clauses in contracts that offer no guarantee of work
- Government guidance on the fair use of exclusivity clauses
- An employer-led code of practice on best practice, with possible Government endorsement
- Relying on workers’ existing common law rights to challenge restrictive covenants in the courts.
Transparency
Some workers and employers may not be clear on the terms of a zero hours contract and their corresponding rights. Individuals may not know that they have been employed on a zero hours contract, whilst employers may not fulfil or understand their responsibilities towards zero hours workers. Some employers may deliberately avoid complying with employment laws, while others may penalise workers for not being available when requested.
The consultation identifies some options to improve transparency:
- Improving the content and accessibility of information and guidance on employment rights and benefits for zero hours workers such as creating new resources like online tools to calculate holiday, sick pay or redundancy entitlement
- Encouraging an employer-led code of practice on the fair use of zero hours contracts
- Producing model clauses for zero hours contracts. The contract could include a “key facts” section to help individuals understand the terms of the contract.
The consultation closes on 13 March 2014. For more details please see https://www.gov.uk/government/speeches/zero-hours-employment-contracts
Contact James Symons by email at: james.symons@freeths.co.uk or by phone on +44 (0) 345 271 6768
