Exclusive zero hours contracts banned

What’s this all about then?

There is now a ban on clauses in zero hours contracts which prevent workers from holding other jobs at the same time.

Legislation: Section 153 of the Small Business, Enterprise and Employment Act 2015 received Royal Assent on 26 May 2015. This section amends the Employment Rights Act 1996 by inserting a new part 27A.

Why?

This provision is arguably a “proportionate response to tackling examples of poor practice” by employers (Neil Carberry, the Confederation of British Industry’s (CBI) director for employment and skills) and will be welcome news for workers who are on these contracts.

Why is this a good thing?

Workers now are supposed to have greater control over their working lives and can support themselves even if there is no guarantee of them receiving an income from one of their employers.

Will it change anything?

It is imperative that measures like this are taken to encourage society to see the benefits of working and to support them in doing so. This is particularly important when one considers the shocking new statistics carried out by Loughborough University and the Trust for London, which show that 43% of people in families with children, and a quarter of working age adults do not have enough income to meet the minimum living standards in London.

However, some argue that the changes do not go far enough and that in reality it isn’t clear if the changes will have much impact. For example, there are concerns that employers could still include clauses in contracts, stating that employees have to be available to work if required by the employer.

What happens if there is a breach?

Nothing. The ban is not backed by any form of enforcement measure, workers have no form of redress against their employers who breach it. Furthermore, employers remain able to operate policies which reduce or cut completely, the hours of those who seek additional employment.

There are also concerns that employers are already taking advice on finding other ways of avoiding the ban, such as by employing agency workers or insisting that their employees act on a self-employed basis. It appears that these issues are “symptomatic of a breakdown in relationships between employers and employees” and show that people are “trying to make extra margin at the expense of one of their stakeholders, which is their people”. This could result in even lower levels of employee engagement, increased levels of stress and a reduction in productivity levels (Labour’s adviser on employment, Norman Pickavance).

What are the arguments against?

Not only do some feel that the changes have not gone far enough, but some groups such as unions and the Labour party, maintain that zero hours contracts should not exist at all. They say that such contracts provide very little protection to employees, as they do not guarantee any hours, shifts can be cancelled at the last minute with no compensation given and they fail to provide for sick pay and annual leave.

What are the arguments in favour of this amendment?

On the other hand, businesses and those who support the other side of the argument, believe that these changes have already gone too far and they are warning the Government about implementing any further regulations. They say that maintaining the flexible nature of the labour market is key for the success of the economy as it aids job creation, which was particularly necessary during the recession. Furthermore, they say that these contracts benefit workers as well as employers. In particular, they argue that these contracts suit those that are seeking short term or seasonal positions. Additionally, the CBI argue that any legislation should target bad practice and not demonise all casual forms of employment.

Sources

• http://www.theguardian.com/uk-news/2015/may/26/conservatives-zero-hours-contracts-small-business-act-david-cameron-toothless
• http://londonist.com/2015/05/a-third-of-londoners-cant-afford-decent-living-standards-report.php
• http://www.legislation.gov.uk/ukpga/2015/26/section/153/enacted
• https://home.bt.com/news/news-extra/what-are-the-changes-to-zero-hour-contracts-11363983213235
• http://www.trustforlondon.org.uk/research/minimum-income-standard-for-london/
• http://www.hrmagazine.co.uk/hr/analysis/1151255/where-next-for-zero-hours-contracts