Zero hours contracts have been a hot topic for some time and you may recall the Government conducted a consultation exercise about them back in 2014. The main conclusion reached from that consultation was that exclusivity clauses in zero hour’s contracts needed to be addressed.
The usual aim of a zero hours contract (also known as a casual or bank contract) is that there are no minimum hours of work, so the worker waits until they are called upon by the employer. The particular clauses that the Government wishes to ban are those which would prevent a zero hours worker from working for another employer during their ‘waiting time’.
The relevant provisions in the Small Business, Enterprise and Employment Act 2015 came into force on 26 May 2015 and have added new clauses into the Employment Rights Act 1996.
The most important new clause (section S.27A) states that “any provision of a zero-hours contract which prohibits the worker from doing work or performing services under another contract or under any other arrangement, or prohibits him or her from doing so without the employer’s consent, is unenforceable against the worker.”
In addition, a new section (27B) has been added to give the Government power to take additional steps to prevent zero hours workers from being stopped from working for other employers. It is not clear yet what this might involve. However, the law stops short of actually giving any protection from detriment to zero hour’s workers, so there are no anti-avoidance measures yet.
Our view? Zero hours contracts can work well for employers and workers where a flexible source of additional labour is needed. However, problems can arise where regular hours develop, where zero hours are the main source of labour or where employers expect workers to always be available. We do not expect that the ban on exclusivity clauses will make any significant difference to most employers.
If you have zero hours workers or if you are thinking of using them, it is worth making sure that you put the right documentation in place. We can help with contracts for all sorts of businesses, so please get in touch to see how we can help you.