Zero Hours Contracts March 2016

Zero Hours Contracts

The law relating to zero hours contracts has been changed with effect from 11 January 2016.  Protections for workers and employees have been brought in by The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.

The background is that many employers, for example in the retail sector recruit individuals for casual work on zero hours contracts.  This describes a contract under which an employer is not obliged to offer, and the individual is not obliged to do, any work. So no hours may be offered for work without there being any breach of the agreement.  Zero hours contracts are popular because employers gain flexibility in the face of changing market conditions.

Employers have attempted to have their cake and eat it by making zero hours contracts exclusive.  They do this by including terms which prevent the employee from working for anyone else, despite the fact that the employer is not bound to offer even one hour of work.

Following a ground swell against exclusive zero hours contracts, the legislation now:

·       allows exclusive zero hour contracts but only if the rate of pay for each hour worked under the contract exceeds £20;

·       allows workers under a zero hours contract not to suffer “detriment” because a worker has worked elsewhere;

·       allows a worker in a zero hours contract to go to the Employment Tribunal if they have suffered a detriment;

·       enables a Tribunal to find that there has been a detriment and award compensation.

As soon as an employee enters into an exclusive zero hours contract he gains the entitlement to complain to a Tribunal for detriment.  The complaint does, however, have to be brought within three months of the detriment complained of (or the last if there has been a series of acts amounting to detriment).  If an employer dismisses an employee for a breach of an exclusivity term in a zero hours contract, then that dismissal is automatically unfair.  Furthermore, the normal qualifying period of two years employment before an employee can complain of unfair dismissal does not apply in this case.

These changes coupled with changes in the burden of proof which operate in favour of the employee and against the employer send a clear message that attempts by employers to rely upon zero hours contracts containing exclusivity clauses, will prove costly to errant employers.

For further information about employment law contact Nigel Pepper Consultant or Patrick Nelson Solicitor on 01785 211411.