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Parliamentary Committee publishes interim report on use of Zero- hours contracts

30th April 2014
A Parliamentary Committee has published an interim report on the use of zero - hours contracts. This is quite separate from the Government's consultation on this topic, but is well timed to contribute to the Government's analysis of that consultation.
The Scottish Affairs Committee, which published the report, has concluded that the Government's own consultation process has been too narrow, focusing on remedying problems with exclusivity and transparency, which the Committee state does little to help workers that are exploited under zero-hours contract arrangements. The Committee also criticises the Government's view that a low-paid worker can challenge their employer in the courts, as being "fanciful". It points out that this is unrealistic due to the costs of litigation and the fact that any worker that commences such legal action is at risk of being penalised by their employer.

In summary the Committee concluded that in the majority of cases zero-hours contracts should not be used. The Committee took evidence and found that 20%of workers on zero-hours contracts are paid less than their permanent equivalents doing the same job, that 5% are paid less than the national minimum wage, that 6% attend for work having paid for childcare and travel, simply to be told that no work is available, and that Jobcentre staff pressurise job seekers into taking zero- hours contracts and threaten to penalise them if they down down a position on a zero-hours basis.   

The report states that zero-hours contracts should only be used where an employer can objectively justify it, that workers should be told from the outset what type of contract they are on, that there should be a cooling-off period between the offer and taking up a zero-hours contract, and that where a worker attends for work to simply be told that no work is available that the worker should be compensated for the inconvenience caused. Of note, the Committee recommends that if there is to be some form of Code of Practice on zero- hours contracts, it should only be a stage following changes to legislation aimed at reducing the use of zero- hours contracts.

In our view the Committee has correctly identified the obvious practical flaw in suggesting that workers have the genuine opportunity to bring litigation against any employer that uses zero-hours contracts. The fact that workers may feel compelled to accept zero- hours contracts indicates that they are unlikely to afford or want to commence any litigation against an errant employer. Turning up for work to be told none is available is also a common complaint we hear about the use of zero hours contracts. However, for some a zero-hours contract can be good, for example for someone considering semi-retirement, or a top up on a pension. In reality zero hours contracts are particularly precarious for anyone with significant responsibilities for dependent children, or needing a steady income to meet regular mortgage payments; especially if they are expected to be the main income earner in their family.

If you need advice on any of the issues raised in this article do not hesitate to contact us at Hallett Employment Law Seervices Ltd.    
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