On 15 October the Department for Business Innovation and Skills published its Zero Hours Contracts: Guidance for Employers. This web-based resource is fairly brief but usefully covers the main issues. As I have mentioned before the term “zero hours contract” is not legally defined so the Government’s description is helpful:
A zero hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.
The guidance confirms that everyone employed on a zero hours contract is entitled to statutory employment rights with no exceptions.
Examples of “appropriate use” are provided including working for new businesses, seasonal work, covering for unexpected staff sickness, working at special events and testing a service. Perhaps more contentiously there is also advice concerning inappropriate use. The guidance states that “they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable”.
It is also indicated that zero hours contracts might not be appropriate if an individual work regular hours for a continuous period, e.g. someone who works 9.00 a.m. to 1.00 p.m. Mondays to Wednesdays for 12 months. It is suggested that better options for such an employee would be a permanent part time contract or a fixed term contract.
The guidance also addresses the issue of exclusivity clauses and in this regard it is unequivocal. It points out that under the Small Business, Enterprise and Employment Act the use of an exclusivity clause on a zero hours contract is prohibited so that, if such a clause is included, “the law states the individual can ignore it”. Attempts at avoidance, such as requiring permission to look for alternative employment, are similarly banned.
In fact these new rules concerning exclusivity clauses are yet to take effect but the Government has published, in draft, the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015. The Regulations include a right for employees working under zero hours contracts not to be unfairly dismissed if the reason or principal reason is that the employee has failed to comply with an exclusivity clause. Significantly (and appropriately in my view given the general nature of zero hours contract work) there is no qualifying period for protection from unfair dismissal on this ground so it is available from day one.
In addition, there is a right for workers (note that this applies to all workers, not just employees) working under zero hours contracts not to be subjected to any detriment by, or as a result of, any act, or deliberate failure to act, by an employer for the reason that the worker has failed to comply with an exclusivity clause. Again there is no qualifying period.
The protection is available in respect of all zero hours contracts including those already in place. However it should be remembered that these are draft Regulations and an implementation date is yet to be announced.