Zero or hero? Why zero hour contracts are making the news

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Posted in:Corporate and Commercial, HR and Employment|April 7, 2015 | Join the mailing list

As general election campaigning hots up, zero hour contracts are, once again, high on the list of issues being debated.

Conservative leader and Prime Minister, David Cameron, has said that he wouldn’t be able to live on a zero hour contract, and last week Ed Miliband announced that a Labour government, if elected, would bring in legislation substantially limiting their use.

Under Labour’s proposals, anyone who has worked regular hours for 12 weeks or more but whose employment contract is a zero hours one, would have to be offered a new contract with guaranteed hours instead. Labour’s announcement has generated further heated discussion
on this already lively issue and several high profile business leaders have attacked the plan as going “too far” and being a “heavy handed” move which would damage the flexibility of the UK’s job market. Others, however, have welcomed the proposal.

So with all of this in mind, many people, especially those who are not themselves on zero hours contracts, may find themselves wondering what exactly one is and why they are causing all this debate.

A true zero hour contract is a contract of employment where the employer is not obliged to provide any work to the employee (and only pays the employee when work is actually done), and the employee in return is not obliged to accept any work that’s offered
to them. Effectively there’s no obligation on either side and it’s debatable whether such an arrangement actually amounts, in law, to an employment contract at all.

However, the type of contract that’s generating all the discussion is different from this and is more one sided, as while the employer is not obliged to offer work to the employee, the employee is obliged to accept any work that’s offered to them. The employee,
under such a contract, is not guaranteed any work (or pay), but is still expected to be available for work when called upon by their employer. Furthermore, some employers include exclusivity clauses in contracts such as these, preventing the employee from
working for anyone else.

While there seems to be a cross party consensus that exclusivity clauses are a bad thing and should be banned, apart from this there are differing views as to what legislation should be brought in to regulate zero hour contracts and their use. Some politicians
see the contracts as exploitative and unfair, whilst others see them as a key way of enabling businesses to deal effectively with varying and inconsistent levels of demand for their products and services.

Labour leader, Ed Miliband, has referred to ending “the epidemic of zero hour contracts” by passing “a law that says if you’re working regular hours, you’ll get a regular contract…a legal right that will apply to all workers after 12 weeks”. Labour claims that
its plan would see 92% of people who work on zero hour contracts moving to more regular contracts with guaranteed hours.

However, Vince Cable, Liberal Democrat and the Coalition Government’s Business Secretary, has reportedly said in response that he doesn’t “see the Miliband proposals as being practical”. Comments from the CBI, the British Chambers of Commerce and the Institute
of Directors have also been critical.

So, we’ll see what the election on May 7th brings, but whoever ends up in power there’s certain to be legislation of one sort or another on zero hour contracts before too long. Rest assured the Berg employment team will keep you posted!

For more information about any of the above or for practical commercial advice on this or any other aspect of employment law, please contact Nigel Crebbin
of the Berg Employment Team on 0161 833 9211 or email him at

Follow us on Twitter: @Berg_HR

(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should
be obtained before taking, or refraining from taking, any action as a result of this article.)




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