Franchise Bulletin: June 2015 - Calling time on zero hour contracts

Many sectors, such as the retail and hospitality sectors, and many other seasonal industries rely heavily on zero hours contracts to deal with fluctuating demand within their workforce. The widespread use of zero hours contracts is highlighted by the Chartered Institute of Personnel and Development’s estimate that one million workers are engaged via zero hours contracts. It is also widely believed that their use has risen in recent years due the economic pressures on employers, more of whom are seeking to operate a more flexible workforce.

Despite the recent negative press that the use of zero hours contracts has attracted recently, it should not be forgotten that as well as being of benefit to employers, many individuals engaged on zero hours contracts, such as students, young people and individuals who have partially retired or who have retired but who wish to return to work via a flexible arrangement, benefit from the flexibility they afford. It is therefore unsurprising that the more extreme calls for a ban on the use of zero hours contracts is not one of the options being considered by the Government in its consultation on the topic launched on 19 December 2013. The consultation has instead focused on areas of concerns and is intended to explore areas of perceived abuse of zero hours arrangements by employers and whether there is any form of regulation required to protect workers engaged via these arrangements. The Government position is that they are "seeking ways to prevent any abuse and to maximise opportunities both for employers seeking to create jobs and for individuals to get work that suits them."

The two major concerns identified, which are to be explored in the consultation, are transparency and the use by employers of exclusivity clauses

Transparency

Improving the content and accessibility of information and guidance on employment rights and benefits for zero hours workers such as creating new resources like online tools to calculate holiday, sick pay or redundancy entitlement;

Encouraging an employer-led code of practice on the fair use of zero hours contracts; and

Producing model clauses for zero hours contracts. The contract could include a "key facts" section to help individuals understand the terms of the contract.

Exclusivity clauses