In the UK we have seen a steady rise in the use of zero hours contracts, a development which has generated political controversy. Under a zero hours contract, the employer does not guarantee to provide the worker with any work and pays the worker only for work actually carried out. The worker is expected to be available for work if and when called on by the employer.
Zero hours contracts are used in many industries, but particularly in the retail sector. Proponents of these types of contracts point to their flexibility, noting that they are particularly useful in the case of employers whose needs for workers fluctuate from time to time.
The most up-to-date Office for National Statistics report on zero hours contracts, published in September 2015, stated that, between April and June 2015, around 744,000 people in the UK, or 2.4 percent of the country's workforce, were employed under zero hours contracts for their main employment.
Yet zero hours contracts have been the subject of debate and media scrutiny for some time, and concerns have been raised about the need to protect zero hours workers who, because of the nature of the contracts, are not afforded the same rights and protections as other employees. Statistics also show that people on zero hours contracts are more likely to be women, full-time students, or in younger or older age groups as compared with other people in employment.
The use of exclusivity clauses in zero hours contracts has caused particular consternation and was the focus of much political discourse in the UK in 2015. An exclusivity clause is defined in the Employment Rights Act 1996 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 therefore prevent a worker from working for someone else, even though the employer with whom that employee had contracted was not providing them with any paid work.
On 26 May 2015, an amendment to the Employment Rights Act 1996, rendering such clauses unenforceable, came into effect. However, many in the UK have questioned the efficacy of the amendment. While exclusivity clauses were made unenforceable, an employer could simply choose not to give any work to an employee who did work for another employer.
Accordingly, Parliament enacted the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015, which came into force on 11 January 2016. These regulations provide 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 the 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 of service 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).
There is no doubt that the use of zero hours contracts will remain an issue for debate in the UK and we can expect further transformation in their use over the coming years. However, the new regulations are a positive step for protecting zero hours workers in the UK.