Zero-hours contracts: 2015 update

Insight

Zero-hours contracts

Since then, there has been a crackdown on zero hours contracts.

There was a large consultation which was dealt with rapidly by the Government and received over 36,000 responses from union representatives, employers, employees and other business representatives.

From this came the Small Business, Enterprise and Employment Act 2014 which, amongst other things, prohibited the use of exclusivity clauses in zero hours contracts.

What does the new Government guidance on zero-hours contracts say?

We have now received the long-awaited guidance from the Government in relation to the appropriate use of zero hours contract. Whilst the guidance is worth a read there are certainly no lightbulb moments within it.

The guidance lists examples of situations when a zero hours contract might be appropriate including:

New business starts up.
Seasonal work.
Unexpected sickness.
Special events.
Testing a service.

The guidance states that usually zero-hours contracts should be used as a temporary measure.

The guidance also sets out some best practice guidance for employers such as:

Providing individuals with information about what employment rights they have and don’t have under their zero hours contract.
Explaining to individually in clear terms how work will be offered.
Assurances could be made to individuals that they will neither be obliged or expected to accept an offer of work if it is made.
Ensuring the individual is aware and comfortable with how their zero-hours contract can be brought to an end by both parties.
Unless unavoidable companies should not cancel work at late notice.

What does this mean for me?

Our advice remains that zero-hours contracts if used properly, work well for both companies and individuals. They facilitate certain flexibility that can be beneficial for all parties involved.

We hope that the new guidance will continue to encourage employers to use zero-hours contracts in the way they are intended, although some people may see this as red tape. Time will tell whether a loophole will be found.

Zero-hours contracts: 2015 update