Labour Government and Zero-Hour Contracts

A zero-hours contract does not guarantee the employee any minimum number of hours of work, meaning that there can be long periods when no work at all is available. Contracts vary in respect of the employee’s obligations to accept whatever work is offered to them and their rights to turn down work. Since 2015, it has been unlawful to say that a zero-hours employee cannot do work for anyone else while the zero-hours contract is in existence.

Although these kind of contracts can be very useful for employers, they can create anxiety and financial insecurity for employees. Therefore, in 2021, the Labour Party considered a complete ban on zero-hours contracts.

This initial proposal seems to have been watered down a little, and Labour’s current position is that it would ban zero-hours contracts which were ‘exploitative’.  It is unclear exactly how this would be defined.

It could be that guaranteeing an employee only one hour of work per week would be allowed, since this would not technically be a zero-hours contract.

Labour would also give workers the right to a contract which reflects their average hours (over a 12-week reference period) but it is undecided how and when this would be calculated. Given that many zero-hours employees have work which fluctuates according to seasonal demand, there could be a very different 12-week average if it was taken during a period of high demand than during a period of low demand.

Labour proposes giving zero-hours employees the right to more notice when their shifts are cancelled or changed, and compensation for shifts cancelled or changed without reasonable notice. It is yet to be seen how much notice would be considered reasonable.

Labour would not prevent employers using fixed-term contracts, such as for seasonal work, nor paying employees overtime. It therefore seems likely that employers would have to rely on these methods to manage their staffing levels during periods of fluctuating demand.

The Liberal Democrats intend to set a higher minimum wage for zero-hours employees. This would be 20% higher in order to compensate them for the uncertainty regarding how many hours of work they will be allocated. The Liberal Democrats would also provide the right to request a fixed-hours contract after one year, and any refusal by the employer to honour this would have to be reasonable.

It seems likely that if either of these parties wins the election, employers may face higher costs and less flexibility in relation to zero-hours employees.

If you have any questions, please contact us for advice by emailing enquiries@perspectivehr.co.uk or by phoning 01392 247436.

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