Government consults over use of zero hours contracts

The Government has launched a consultation over new proposals that seek to ban companies from imposing exclusivity on zero hours contracts that offer no guarantee of work and stop employees from working for another company.

The proposals also contain proposals on how to tackle the lack of transparency in the way zero hours contracts are currently being used.

The launch of the consultation follows a fact-finding exercise that was carried out over the summer by the Department for Business, Innovation and Skills (BIS) to explore how these contracts are currently being used.

The review highlighted a range of concerns of including:

Exclusivity
This is where someone agrees to a contract that does not guarantee them a minimum number of hours and is stopping them from working for another company. This is described as an ‘exclusivity clause’. In certain cases this can mean that people were stopped from looking for work elsewhere particularly when they needed more hours to bump up their earnings. Feedback from employers themselves suggests awareness that there can be abuses that limit flexibility.

Transparency
There is no clear or legal definition of a zero hours contract and it can cover a number of working arrangements. This can lead to confusion and a lack of understanding on contract details and what it means for the individual. In some cases people were not aware of the fact that there was a possibility that they might not be offered work on a regular basis.

Uncertainty of earnings
The amount of money a person on a zero hours contract can expect to earn is dependent on the number of hours worked. This means that people on a zero hours contract can find it hard to calculate their earnings and it can lead to concerns about how benefits might be affected.

Business Secretary Vince Cable said: “Employers need flexible workforces and people should have the choice in how they work. But this shouldn’t be at the expense of fairness and transparency.”

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