This has been a hot topic in the news recently, particularly around the topic of exclusivity clauses and their enforcement. The recent legislation that has dealt with this topic is ‘The Small Business, Enterprise and Employment Act 2015’, with and ‘The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015’. The legislative definition uses the term ‘worker’ when describing a person on a zero hours contract, however many employers define them as either ‘employees’ or ‘workers’. For this article we will use the term ‘worker’
Zero hours contracts used in the right situations, for suitable roles and implemented in the right way, can be beneficial to both employers and workers.
From the employer’s point of view the benefits of using zero hours contracts are that it provides a means of managing fluctuations in demand, the ability to provide cover for absences and the opportunity to fully utilise the workforce. From the worker’s point of view is that it provides them with the flexibility to work for different employers on a regular basis or over set periods of time, particularly in businesses that are project based or operate seasonally.
It is this ability for the worker to work for different employers at the same time, which is central to the issue of exclusivity clauses in zero hour contracts. It is now illegal for an employer to try to enforce an exclusivity clause in a zero hours contract, unless that employer can guarantee the worker a weekly income. The sensible reasoning behind this is that an employer cannot now indefinitely employee someone on a zero hours contract, nor guarantee that worker a certain amount of work without giving them an opportunity to earn more money with another employer.
There are other aspects to the legislation that go to great lengths to protect the zero hours worker from unfair treatment. However there is also a recognition that a suitable and fair usage of zero hours contracts can be appropriate.
For the future there is further legislation currently being drafted, which will ensure workers on zero hours contracts are not treated less favourably than employees on permanent contracts.
In summary there is a place for zero hours contracts if they are justified and implemented fairly, while also avoiding exclusivity clauses.
The information contained in this article is only to be used as a guide and is in no way a substitute for professional HR or employment law advice. This article is a view and interpretation of BWA People Ltd of the topic(s) covered.