Zero hour contracts get some bite

Posted 12/01/2016 By: Jessica Piper

Much has been made of zero hours contracts in the press over the last few years. These contracts can be very useful for employers in ensuring a pool of casual staff to assist with fluid work levels, and for individuals requiring flexible working arrangements. However, it has also been acknowledged, most notably by the Government, that individuals working under these arrangements require legal protection to prevent businesses from taking advantage of them.

The main issue with zero hours contracts relates to exclusivity clauses (i.e. provisions that prohibit workers from working for other employers). Following the introduction of the Small Business, Enterprise and Employment Act 2015, these clauses have been unenforceable since 26 May 2015. However, despite this change in legislation, employees and workers were left without assistance in reality, as any breach of this ban was not accompanied by any sanction. As a result the legislation had no “bite”.

Following consultation on how to prevent employers evading the ban on exclusivity clauses, The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 were made, and are now in force (from 11 January 2016).

Under the new Regulations, employees will be regarded as automatically unfairly dismissed, requiring no qualifying period, if the principal reason for the dismissal is that the employee breached a provision preventing him or her from working for another employer.

What is likely to be of more interest in this arena, as the purpose of a zero hours contract tends to be to avoid the employment relationship, is that Regulation 2(2) applies to all workers and protects workers engaged under a zero hours contract from suffering any detriment due to breaching an exclusivity clause. Such a detriment might include being offered fewer hours than fellow workers.

Any claim will be subject to the usual 3 month time limit for bringing claims and claimants will have to engage with the ACAS Early Conciliation procedure prior to commencing with any action.

If you are a business concerned about the remit of your zero hours contracts, or are an individual who has faced dismissal or detriment because of an exclusivity clause, please contact a member of the Ashtons Legal Employment Team for further advice.