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Zero hours contracts soar

Adam Pennington

According to the Office of National Statistics (ONS) the number of people on so-called ‘zero hours contracts’ has soared in recent years, to over 900,000. Article from Adam Pennington is an employment law solicitor at Stephensons Solicitors LLP.

In the past year, issues surrounding zero-hours contracts – widely vilified for exploiting workers – have rarely been far from the headlines. Sports Direct famously caved into pressure in 2016, offering its directly employed, casual retail staff at least 12 guaranteed hours of work a week instead of zero-hour contracts. While this only affected some of the company’s staff, it was still hailed as a significant breakthrough by opponents of zero-hours contracts.

The ONS figures show that 2.8 percent of the UK’s workforce are not guaranteed minimum hours of work – 101,000 higher than the same figure from December 2015. Some – including the Labour Party, which pledged to scrap zero-hours contracts if elected – say this only illustrates the need for decisive action on an unfair system. However, regardless of the recent backlash, there is still a place for a more flexible approach in the workplace. Indeed, if zero-hours contracts are used correctly, they can benefit both the employer and employee.

They can stop workers from being tied to one employer and allow them to take up jobs on a temporary basis with no commitment, as and when they require work. Equally, there is no obligation on the employer to offer work. The arrangement provides much more flexibility, saving potential costs as well as limiting employer liability. Many appreciate this flexibility, especially because it allowed the UK to bypass higher levels of unemployment during the recession. The arrangement gives employers the opportunity to recruit according to business needs.

But the statistics do show some worrying trends. The ONS report revealed that 64 percent of those on zero-hours contracts had been in their role for more than a year. It is also becoming increasingly clear that those taking up such contracts, some without realising they are doing so, are women, people in full-time education, or those in younger or older age groups. While such groups may appreciate the flexibility, the concern is that some employers may exploit the use of zero-hours contracts and such practices may also be discriminatory.

Increasingly there are cases of people on zero-hours contracts where the way they work indicates they should be entitled to similar rights to other employees. Under zero-hours contracts they are being denied these benefits. The fact that an individual is said to be engaged on a casual or zero-hours contract does not determine his or her employment status. If employees are getting regular work and hours, regardless of the contract they are engaged under, they may benefit from the additional rights an employee has. Whether or not an individual is an employee, a worker or neither, will depend on the reality of the employment relationship and, in particular, whether or not there is mutuality of obligation between the organisation and the worker.

For example, in a recent high-profile case, the claimants were engaged under an arrangement that was called a ‘zero-hours contract agreement’ but, in reality they had worked fixed hours on a regular basis over a number of years. Once the rota had been prepared, the claimants were required to work and the employer was required to provide that work. The Employment Appeal Tribunal concluded they were, in fact, employees. For the more vulnerable in the society, zero-hours contracts can be a cause of anxiety about how many shifts will be available and what their take-home pay will be at the end of the week.

Zero-hours contracts can be a welcome option for the flexibility they offer but equally, as more employers make use of them, the government and courts may need to do more to protect vulnerable workers and penalise companies that abuse their use.”