There has been a great deal of press coverage recently about zero hours contracts. What exactly is a zero hours contract? Put simply, it is a contract in which the worker has no guaranteed hours of work and is paid only for the work carried out.
Zero hours contracts can be attractive to employers as it enables them to respond to fluctuations in demand for services. However, for the worker there is a great deal of uncertainty due to the absence of guaranteed hours and income, which can makes it difficult to plan financially for the future. The need to be available for work when called upon can also be disruptive.
The rights of those on zero hours contracts
There will often be issues as to whether someone working under a zero hours contract is an employee or a worker. Both employees and workers are entitled to national minimum wage, paid annual leave and protection against most forms of discrimination. However, employees enjoy greater protection than workers, most importantly the right not to be unfairly dismissed and the right to receive a statutory redundancy payment.
Ed Miliband, has called for a ban on exploitative zero hours contracts. On 16th September 2013, Vince Cable announced plans for a public consultation on how to tackle the potential abuse of zero hours contracts. This could result in measures to force employers to switch workers to more permanent contracts after a certain period of time. A Code of Conduct has also been suggested to provide workers with better information about their rights.
The Department for Business, Innovation and Skills has indicated that the consultation date will be confirmed later this year, so we look forward to hearing more about what the Government’s thinking on zero hours contracts.
Please let us know if you require any advice in respect of employment law.