We are all aware of the Government’s professed fondness for stoking the bonfire of red tape of employment regulation. After all, so the argument goes, what better way of building a stable, sustained economic recovery than by making it easier to sack people in the interests of creating a flexible workforce? Alongside this political hype comes the harsh economic reality that nearly 10% of the UK working population are now ‘underemployed’ (i.e. people in employment who want to work more hours but are unable to get them).

According to a recent labour market survey, the problem is most acute among young workers, with the National Institute of Economic and Social Research reporting that in 2012, 30 per cent of those aged 16-24 who were in employment wished to work longer hours. There has also been a sharp increase in the number of so-called zero hours contracts. The Office of National Statistics has reported that the number of young people working on zero hours contracts has more than doubled since the start of the economic downturn. Read more here.

A zero hours contract is usually a contract for a casual worker where there is no guarantee that the employer will offer any work, but the worker is expected to accept any work offered. The intention behind the contract is usually that the individual will be a ‘worker’, rather than an ‘employee’ or ‘self-employed’ contractor. If a zero hours worker does not qualify as an ‘employee’ for employment protection purposes, they effectively have no protection against being unfairly dismissed or entitlement to a redundancy payment.

However, employers should be cautious about variations of existing contracts - or using new contracts without fully understanding the implications – as, at the same time as this new economic reality, the courts have demonstrated an increasing willingness to strike down written agreements which bear little resemblance to the reality of day to day working relationships.