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Zero-hours contracts: 2016 update

In May 2015, the legislation around zero-hours contracts was tightened up.  The main provisions that came into force were that any exclusivity clause within zero-hours contracts was unenforceable.

However, there was no real remedy for the worker involved.  This has now changed and this protection for zero-hours workers has gained some teeth that, as an employer, you should be aware of.

The previous position

You should be aware that since May 2015 exclusivity clauses within zero-hours contracts have been made unenforceable.

An exclusivity clause is a clause where the employer tries to prevent the worker from doing work for anybody else whilst they are engaged under the Zero Hours Contract with them. It also covers clauses that only allow that worker to do work for other people if they have the employer’s consent.

For many, this was welcome protection for zero-hours workers from unscrupulous employers.  For many employers, this had little effect, provided you were using zero-hours contracts properly.

What was the problem?

Whilst the new laws came into force in May 2015, there was nothing really to deter employers from still including exclusivity clauses in zero-hours contracts and/or encourage them to leave them out.  Therefore a number of employers have continued to use their standard zero-hours contracts, which include exclusivity clauses.  This is often done in the hope that it would deter workers who may not know that these clauses are unenforceable.   Put simply there was nothing to encourage employers to remove them.

Zero-hours contracts have been something that the Government have been focusing on for the last 12 months and it was inevitable that, in time, they would bring something in with a little more bite.

The new law

On 11 January 2015, a new law came into force to give zero-hours worker protection some teeth.  The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2014 does exactly what it says.  It gives redress for zero-hours contract workers if the employer has tried to enforce an exclusivity term in their zero-hours contract.  It gives zero-hours contract workers significantly more protection than they had before this date.

The new protections for zero hours workers are as follows:

  1. If their services are discontinued because they have been working elsewhere or doing so without the employer’s consent that will be classed as an automatic unfair dismissal.  Therefore it means workers can bring an unfair dismissal claim rather than just employees.  There is also no need in this instance for the worker to have the two years’ service required by an employee to bring a “normal” unfair dismissal claim.
  1. A worker can also bring a claim for being subjected to a detriment due to them working elsewhere or doing so without the employer’s consent.  Again, in this way, workers are being treated the same as employees, for example, who may have been treated less favourably due to their fixed term status.
  1. Interestingly, if either of the above claims is brought by a worker against an employer the burden of proof will be on you as an employer to establish that the dismissal or detriment was for something other than the worker working for someone else or doing so without your consent.

The above is a significant broadening of the protections available to workers.

What does this mean for me?

Provided you are using zero-hours contracts in the way they are meant to be used, to facilitate flexibility for both company and individual, you should see little impact of this recent strengthening of the worker protections.

It is important that you are aware of your company’s selection criteria for the use of any zero-hours contract workers you may have on your books.  It is also important that any staff involved in the selection of zero-hours workers are offered updates and training if required, so as not to risk such a claim being brought against your business.

If you need any help drafting zero-hours contracts, training your staff on how to operate them fairly or any other area of employment law please contact the Employment & HR team on 01332 227595.

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