Consultation on zero hours contracts

26 August 2014

Having decided in June to ban the use of exclusivity clauses on zero hours contracts (ZHCs), the government is now asking for views on how to stop employers potentially sidestepping such a ban.

Many thanks to Craig Gordon of HR Bullets for allowing the reproduction of his bulletin:

A new Section 27A will be inserted into the Employment Rights Act 1996 (via the Small Business, Enterprise and Employment Bill) making exclusivity clauses unenforceable. This will be supplemented by a new Section 27B allowing the Secretary of State to make further regulations dealing with anti-avoidance issues.

The consultation asks for views on:

• what the likelihood of employers avoiding a ban on exclusivity clauses might be and how that might be achieved;
• whether the government should do more to deal with potential avoidance, how might that be best achieved, and whether to do this alongside the ban or wait for evidence of whether such avoidance is taking place;
• how potential avoidance could be dealt with;
• whether there should be consequences for an employer if they circumvent a ban on exclusivity clauses and, if so, what those consequences should be; and
• whether there are any potentially negative or unintended consequences as a result of the wording of the legislation.

As regards further guidance, rather than one overarching code of practice, the consultation envisages industry-led/owned sector-specific codes of practice on the use of ZHCs. While up to unions and employers to agree the precise contents of such codes, the consultation suggests that the issues to cover could include:

• when it is appropriate/not appropriate to use a ZHC;
• whether and how to promote clarity, e.g. job adverts and contracts stating the type of contract up front;
• the rights and responsibilities of the individual and the employer and how to calculate accrued benefits such as annual leave where appropriate;
• best practice in allocating work; and
• recommended practice around notice of hours of work or cancellation of work.

The consultation also includes a report on the earlier consultation into ZHCs which closed in March 2014.

The closing date for responses to the consultation is 3 November 2014.

CIPP comment

The Policy team will be reviewing these documents and if appropriate will issue a survey to gather members’ views shortly.