Zero hours contracts have been the subject of debate and media attention for some time now as they continue to be used by employers whose needs for workers fluctuate. The most up-to-date Office for National Statistics report on zero hours contracts, published in September 2015, stated that around 744,000 people were employed on zero hours contracts in their main employment between April and June 2015, representing 2.4 per cent of all people in employment. Zero hours contracts are often used within, for example, the retail industry, and no doubt this figure will have risen to accommodate the Christmas shopping rush, even if the now infamous Black Friday sales were not quite as eventful this year as predicted.
Much has been said about the pros and cons of zero hours contracts, with the exclusivity clauses which they often contain coming under particular scrutiny.
Section 27A(3) of the Employment Rights Act 1996 (ERA) defines an exclusivity clause as:
"Any provision of a zero hours contract which (a) prohibits the worker from doing work or performing services under another contract or under any other arrangement, or (b) prohibits the worker from doing so without the employer's consent."
An exclusivity clause could, in effect, therefore limit a worker from working for someone else, even though the employer with whom that employee had contracted was not obliged to provide them with any paid work.
Whilst section 27A of the ERA was enacted in response to this problem, rendering such clauses unenforceable, the efficacy of this amendment was questionable since an employer could simply choose not to give any work to an employee who did work for another employer.
However, the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015, which came into force on 11 January 2016, seek to remove the ability of employers to circumvent section 27A, providing that:
- Any dismissal of an employee employed under a zero hours contract is automatically unfair if the reason or principal reason for the dismissal is that that employee had breached a contractual clause prohibiting him or her from working for another employer. An employee who is dismissed on these grounds is, therefore, able to bring an unfair dismissal claim before an Employment Tribunal seeking a declaration and/or compensation.
- There is no qualifying period required for a zero hours employee to be able to bring such an unfair dismissal claim.
- It is unlawful to subject a zero hours worker to any detriment if they work for another employer in breach of a clause prohibiting them from doing so. (This third provision extends to workers, not just employees.)
Finally section 27A of the ERA has been given the bite that Parliament intended when the amendment to the ERA was first enacted in May 2015.