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Perspectives on proposed reforms on the use of ‘zero hours contracts’

Perspectives on proposed reforms on the use of ‘zero hours contracts’

Colin Leckey, partner in the Employment, Reward & Immigration team at the law firm Lewis Silkin, comments:

“Zero hours contracts are nothing new, but the publicity they have gained during the last five years perhaps made it inevitable they would feature in the election campaign. “Ed Miliband says that he wants to tackle job insecurity. However, while zero hours contracts have captured the headlines, two other employment law measures introduced by the Coalition have had a far more significant impact. These are the extension – to two years – of the qualifying period for unfair dismissal claims, as well as the introduction of Employment Tribunal fees, which has led to a significant drop in the number of claims being pursued.

“Thus far, there has been no suggestion from Labour that a worker who has exercised their right to a ‘regular contract’ could not still be dismissed on just one week's notice during their first two years of service, with essentially no legal recourse. Arguably this has a much greater impact on job security than contractual status.

“It is also unclear what exactly Labour means by a ‘regular contract’, but presumably one with certain pay in return for certain hours. This ambiguity raises a number of unanswered questions and difficulties. First, how much pay – and how many hours – will an employer be required to promise? The outgoing Government has struggled with this issue in its own consultation on zero hours contracts. It is generally recognised that promising a single hour of work and a single hour of pay as a way of getting round zero hours legislation would be abusive, but where is the line drawn, and by who?

“In addition, there continues to be a general shift away from traditional ‘9 to 5’ working arrangements. While this varies from industry to industry, increasing numbers of employers view the notion of core hours as archaic, taking the view that as long as the job gets done they don't mind when or from where the employee does it. Any new legislation in this area could inhibit such flexibility.

“Finally, it is unclear whether a Labour Government would or even could do anything to stop employers from rejigging their employment arrangements so as to avoid any new protections, such as only offering contracts of less than 12 weeks' duration. It is likely that Labour has modelled its proposals on the Agency Workers Regulations, where agency workers acquire a raft of rights once they have completed 12 weeks of service for an end user. However, it was widely observed at the time that those Regulations prompted a shift towards reduced-term engagements for agency workers. If the same happened here, it could have the unintended consequence of lower-paid, zero hours contractors becoming more vulnerable, with employers increasingly disinclined to offer them longer-term contracts.”

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