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Zero hours contracts have become popular with businesses as a way of flexibly engaging casual workers, without creating an ‘employment’ relationship and which are regularly used by companies with fluctuations in the needs of their labour force.
The increased use of zero hours contracts has recently attracted media attention due to concerns that these contracts are being abused by employers. Whilst zero hours contracts provide flexibility to both businesses and workers, there are concerns about the inclusion of ‘exclusivity clauses’ that prevent workers working for other businesses whilst engaged under a zero hours contract. These ‘exclusivity clauses’ are often unjustifiable and negate the flexibility for workers whilst maintaining the benefit of flexibility for businesses.
As a result of the media attention the Department for Business, Innovation and Skills commenced a public consultation into the use of exclusivity clauses in December 2013 following concerns of exploitation of zero hours workers many of whom were low income workers earning the minimum wage.
The result of the public consultation was announced on 25th June 2014 by the Business Secretary, Vince Cable who confirmed plans to ban exclusivity clauses in zero hour contracts and allow workers on zero hours contracts to work or be available for work for multiple employers. It is estimated that the ban will benefit up to 125,000 workers in the UK, and redress the balance of power between workers and less scrupulous employers.
The Government also intend to:
- Commence a consultation into how to prevent rogue employers evading the exclusivity ban, for example by offering 1 hour contracts.
- Development of a zero hours contract code of practice.
- Review and improve existing guidance and information available to employers and workers.