Zero hours contracts have made further headlines with Ed Miliband promising key legislative reforms designed to better protect the worker.
Matthew Kelly, Partner and employment specialist and leading law firm Thomas Eggar LP, comments: “Labour’s measures to address this include giving workers the right to demand a fixed hours contract after six months’ regular service, with such a contract arriving automatically after 12; and the right to receive a payment for short-notice shift cancellations. These are designed purely to provide greater job security and better protections for the zero hours worker.
“Such plans will likely add to the administrative burden on businesses, particularly smaller employers. The obligation to compensate workers for their lost income as a result of short notice cancellations will not only squeeze profit margins, but places greater pressure on managers to anticipate their staffing needs in advance. Employers need to be aware that this erodes the flexibility that these contracts once gave.
“The conditional right to receive a fixed contract in the future, on the satisfaction of a minimum number of hours worked regularly, may just be converted into a ceiling to cap the number of hours any worker will be offered on a weekly basis. There will need to be a provision that simply prevents employers taking on more zero hours staff to distribute the hours between a greater number of workers, reducing the average number of hours worked.
“A zero hours workforce is indicative of an employer cautious about commitment. In a recovering economy, this is motivated by employers needing to reduce their wage bills during off-peak periods. To get around this, we may just see a rise in employers offering fixed-term zero hours contracts of up to 6 or 12 months. “Zero hours contracts remain contentious, and with the Government’s response to consultation expected soon, the debate looks set to continue.”