Ministers consider outlawing exclusivity on Zero Hour Contracts

10 January 2014

Ministers are considering outlawing exclusivity clauses on zero hour contracts, in a faint hearted effort to boost fairness for workers.

The exclusivity clause adds to the problems associated with zero hour contracts – no guaranteed work or pay for workers – by prohibiting them from working for any other employers.

Business Secretary Vince Cable said:

“A growing number of employers and individuals today are using zero hours contracts. While for many people they offer a welcome flexibility to accommodate childcare or top up monthly earnings, for others it is clear that there has been evidence of abuse around this type of employment which can offer limited employment rights and job security. We believe they have a place in today’s labour market and are not proposing to ban them outright, but we also want to make sure that people are getting a fair deal”.

However, this is yet another feeble attempt by a Government who refuses to address the real issue – zero hour contracts are highly exploitative and open to abuse.

The IER, the TUC and many unions have declared their dissatisfaction with the Government’s proposals on exclusivity, pointing out that there are many other issues relating to zero hour contracts in need of reform. To inform the debate, the IER has developed an 8-point proposal, which, if implemented would provide a fairer and less exploitative environment for workers.

Professor Keith Ewing, President of the IER and author of the proposals, puts forth the following recommendations:

All workers must be provided with a written statement of their working time arrangements;

All workers must be engaged on ‘defined hours contracts’, which set out the minimum number of hours they will be required to work each week or month;

Contracts must state how many hours the worker will be expected to be on-call, set out as a percentage of the minimum defined hours with a statutory maximum of 20%. So if a worker is contracted to work a minimum of 5 hours a week, an employer can lawfully require them to work 6 hours a week – with one of these hours ‘on-call’ – but no more;

Workers subject to these controlled on-call arrangements should be entitled to a retainer while on call of at least minimum wage;

Additional flexibility for employers may be secured by providing that the maximum period on call can be averaged over 13 weeks. So if a worker is contracted to work a minimum of 5 hours a week, they may be required to work 13 hours of on-call work at any point and in any distribution over 13 weeks;

For extra flexibility, non-defined hours contracts will remain legal so long as they are introduced with the agreement of a recognised trade union;

These non-defined hours contracts should be limited in time and subject to monitoring and supervising jointly with the trade union;

Breach of these obligations would result in criminal penalties and civil sanctions; there would be no opt outs.

Professor Keith Ewing also says that,

“Most decent people think that the practice of zero-hours contracts needs to be stamped out. It is exploitative and abusive, and while it may benefit some, the convenience of a few must not be allowed to justify the misery of what is likely to be the overwhelming majority.”

“There will no doubt be complaints of over-regulation if the IER’s proposals become policy. But if employers did not behave badly and irresponsibly, and if all employers treated their workers decently and with respect, there would be no need for any regulation on this as on any other issue.”