As I’ve mentioned in numerous recent posts, zero hours contracts have attracted a good deal of attention over the last few months, not least because they are in much more widespread use than many had thought.
Both the government and opposition have had them in their sights, not from the point of view of banning them (or at least not any more), but with a view to eliminating the abuses which are believed by many to accompany them.
One particularly iniquitous aspect of some existing contracts is the requirement to work exclusively for the employer, even though there is no guarantee that work will be provided. It is estimated that some 125,000 people are currently tied to such contracts. The government’s conclusion on completion of its consultation is that this restriction will no longer be permitted.
Announcing the reform, Vince Cable said:
Zero hours contracts have a place in today’s labour market. They offer valuable flexible working opportunities for students, older people and other people looking to top up their income and find work that suits their personal circumstances.
But it has become clear that some unscrupulous employers abuse the flexibility that these contracts offer to the detriment of their workers. Today (25 June 2014), we are legislating to clamp down on abuses to ensure people get a fair deal.
Last December (2013), I launched a consultation into this issue. Following overwhelming evidence we are now banning the use of exclusivity in zero hours contracts and committing to increase the availability of information for employees on these contracts. We will also work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero hours contracts as part of their workforce.
The government is also concerned to prevent attempts to get round the restriction by, for example, offering one hour fixed contracts. There will also be consultation with a view to producing a code of practice on the fair use of zero hours contracts which is due to be published by the end of this year.
The ban is included in the Small Business, Enterprise and Employment Bill (section 139) which was introduced to Parliament on 25 June. It is almost certain that this part of the Bill will attract all party support.
As an aside the Bill also includes some very sensible proposals to clamp down on abuses of insolvency procedures including sales to connected persons in administrations (often within what are called pre-packs) and the abolition of fast track individual voluntary arrangements.