Zero hours contracts: how might the Government "crack down on abuse"?
Author: Darren Newman
Consultant editor Darren Newman asks how the Government might go about strengthening protection for workers on zero hours contracts, and suggests that employees on such contracts who wish to be offered a guaranteed number of hours might already have a potential solution to their problem.
As the coalition Government enters its final year, it looks as though there is room for one more piece of employment law reform. The Queen's Speech on 4 June referred to a number of measures that will be brought forward in legislation, including improving "the fairness of contracts for low paid workers", which the Government has made clear refers to "cracking down on abuse in zero hours contracts". Its consultation on this issue closed in March this year and received over 30,000 responses. Clearly the Government has decided that something must be done.
One issue at which the Government has been looking is "exclusivity", which refers to the situation where an employer does not guarantee working hours to an individual but requires the individual to be available for work and prevents him or her from working for anybody else. We can expect the forthcoming Small Business Enterprise and Employment Bill to deal with this issue head-on; in the debate on the Queen's Speech the Prime Minister promised to outlaw exclusivity in zero hours contracts.
But what does that actually mean? The most obvious measure would be to provide that a contractual term is void insofar as it purports to prevent a worker from working for another employer when engaged under a zero hours contract. However, in practice this might not be straightforward. Such a ban could not realistically be confined exclusively to zero hours contracts, because employers would simply get around it by guaranteeing a single hour of work each week. Nor could there be a blanket ban on employers' claiming the exclusive services of employees. There are many legitimate reasons - from confidentiality issues to compliance with the Working Time Regulations 1998 - why an employer would want to restrict the right of an employee to work elsewhere.
Even if the scope of the ban could be sensibly defined, what difference would it make? The problem that the reform aims to address is the precarious position of employees who risk not being offered any further work if they are not available when the employer calls on their services. But that problem arises not because of a term in the contract, but because of the nature of the relationship between the employer and worker. If the employer is able simply to withhold future offers of work, it does not really matter whether the contract contains an exclusivity clause or not. The threat of no more work being offered will be no less real.
Any attempt to address the problem would have to include a right not to suffer a detriment for turning down work that is offered under a zero hours contract (however that ends up being defined). But of course there will be circumstances in which it is reasonable for an employer to pass over a worker who has a tendency not to be available in favour of one who is always eager for any hours of work that may be offered. Can the law really be drafted in such a way as to "crack down on abuse" without becoming overly complex and restrictive? The temptation for the Government might be to pass a largely symbolic law banning exclusivity clauses but providing no real mechanism to ensure that individuals are not exploited in practice. On this issue at least, the forthcoming Small Business Enterprise and Employment Bill may prove to be something of a damp squib.
One further idea that has been floated is that those on zero hours contracts should have some sort of right to request that they be given more regular hours. There is no indication in the Queen's Speech that the Government is thinking along these lines but, as it happens, it may not need to. The right to request flexible working is being amended from 30 June this year. As well as simplifying the procedure for handling requests, the reforms remove any requirement that the purpose of the request be to provide care for a child or dependent adult. Under the amended right, all employees with 26 weeks' service will be entitled to request a change in their terms and conditions of employment relating to the hours or the times that they are required to work. The heading in part 8A of the Employment Rights Act 1996 may still say "Flexible working" but, in the absence of any need to link the request to caring responsibilities, there would seem to be no reason why an employee needs to be requesting reduced rather than increased hours. All that is required is that the employee is seeking a change in his or her contract. Why couldn't an employee on a zero hours contract use this newly extended right to submit a request for a guaranteed working week?
Of course an employer will be entitled to refuse a request for increased hours provided that the refusal is based on one of the very widely drawn business reasons set out in s.80G(1) of the Employment Rights Act 1996. But the employer will still have to handle the request in a reasonable manner and the Acas code of practice currently before Parliament says that employers should "consider the request carefully". If large numbers of employees felt that they could benefit from increased certainty in their hours of work, they could cause their employer a considerable headache simply through obliging the employer to deal with all of their individual requests.
In attempting to regulate zero hours contracts it may be difficult for the Government to make the reality match the rhetoric, so I do not have high hopes for the Small Business Enterprise and Employment Bill in this regard. It may be, however, that some positive steps have already been taken - albeit accidentally.
