Today’s announcement by the Labour Party of its new policy on zero hours contracts (ZHCs) has taken employers, including the CBI, by surprise. It underlines how the issue of ‘good jobs’ with fair pay and reasonable working conditions is taking a more prominent role in run up to the election.
What are the parties’ policies on ZHCs?
Labour’s new ZHC policy promises a change in the law to entitle ZHC employees to a fixed hours contract where they have, in practice, been working regular hours on a ZHC for 12 weeks (although it is reported that a ZHC worker would have the choice to remain on a ZHC contract). Previously, Labour had proposed an automatic right to a fixed hours contract after 12 months of regular working – reducing this period to 12 weeks is a major change. Labour also supports the exclusivity ban (which has received Royal Assent but requires implementation by the next government) and proposes a new right for ZHC workers to be compensated if shifts are cancelled at short notice. In addition, they support the introduction of a new ACAS Code of Practice.
The Conservatives and Liberal Democrats have, to date, supported the exclusivity ban and measures to enhance information and guidance, for example, on the www.gov.uk website, to improve transparency over ZHC terms and rights.
Other parties have also made ZHC policy announcements. For example, the SNP, UKIP and Plaid Cymru parties all support greater action to tackle the inappropriate use of ZHCs. UKIP wants a code of conduct requiring employers to offer fixed hour contracts after 12 months’ service and Plaid Cymru propose a ZHC ban in health and agricultural sectors. The Green Party would ban the use of ZHCs altogether.
If enacted, Labour’s new policy would limit flexibility, for example, where ZHC employees are used to cover seasonal peaks which may last beyond 12 weeks. It is also not clear how this proposed new right would apply, for example, the announcement refers to ‘employees’, not ‘workers’. However, many staff on ZHCs are workers and do not have full employment status. In addition, depending how the change in the law is drafted, there is a risk that some employers may simply offer contracts with minimal fixed hours to limit its impact.
Whatever the outcome of the election, the contentious nature of zero hours contracts seems set to continue. Employers using ZHCs need to prepare for further change.