John Sprack Training

Zero Hours Contracts - limits of the new protection

14 January 2016

The proliferation of Zero Hours Contracts (ZHCs) in recent years has been a subject of great concern, particularly to those workers living with the uncertainty of relying on work which may vary or disappear at little or no notice and with scant redress.

So the new regulations which purport to give protection to those in this unenviable situation, whilst welcome, are in need of a degree of scrutiny.

The regulations (snappily entitled The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 ) came into force on 11 January 2016. They aim to underscore the provision in the Employment Rights Act 1996 (the 1996 Act), s 27A(3), making unenforceable any provision in a zero hours contract which prohibilts a worker from working for any other employer (an "exclusivity clause") -see http://www.legislation.gov.uk/uksi/2015/2021/contents/made

They make any dismissal of an employee for breaching an exclusivity clause automatically unfair. No period of qualifying employment is required for the employee to bring a claim for unfair dismissal on this basis - it is a "day one right".

Further, any worker who is subjected to a detriment for breaching an exclusivity clause can bring a claim in respect of that detriment. A claim for detriment is not confined to employees, but may be brought by anyone who falls within the wider definition of "worker". Once again, this is a day one right.

The redress for the employee or worker in question lies with the employment tribunal. Compensation is limited to the  statutory cap for an unfair dismissal claim (a year's salary or the current designated amount, whichever is the lower), both for unfair dismissal and for detriment. The claim must be brought within the usual three month time limit, which may be extended by the tribunal in the case of a detriment claim where it is just and equitable to do so (see reg 3(3)). But it would seem that a claim for unfair dismissal brought on this basis must either be brought within three months or the claimant must show it was "not reasonably practicable" to do so (see reg 2(1) as read with s 111 of the 1996 Act).

ZHCs are defined in the 1996 Act  as:

- a contract of employment or a worker's contract under which the undertaking to do or perform work or services is an undertaiking to do so conditionally on the employer making the work or services available to the worker; and 

- where there is no certainty that any such work or services will be made available to the worker.

So there is a measure of protection for workers who ae on ZHCs.

But it is worth making the obvious point that the statutory provisions do not take any steps towards the abolition, or even the reduction, of ZHCs themselves. They are purely aabout exclusivity clauses Although such clauses may be a particularly objectionable feature of some ZHCs, they are only a small part of the picture. The fact that a worker is able to seek other work will, in many cases, not alleviate the economic uncertainty which stems from the ZHC upon which he or she relies for the major part of their income. Nor will it provide them with adequate notice of arbitrary changes to the hours of work which an employer can impose. All that is available to meet these features of the ZHC is a Code of Practice, which has no statutory force. It is available at https://www.gov.uk/government/publications/zero-hours-contracts-guidance-for-employers/zero-hours-contracts-guidance-for-employers

Further, even this limited degree of protection can be avoided by the unscrupulous employer. Note the wording of the definition "where there is no certainty that any such work or services will be made available to the worker" (emphasis added). In other words, a commitment to an hour a week (or a month) will be sufficient to take the contract outside the ZHC definition and hence outside the protection. The alternative would be to cast the net so that it would cover all those whose employer guaranteed a certain minimum total number of hours per week. This was in fact the alternative favoured by the majority of those who responded to the government's consultation on ways to prevent avoidance - see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/410114/BIS-15-59-zero-hours-contracts-government-response-to-the-banning-exclusivity-clauses-tackling-avoidance-consultation.pdf

Finally, as with other employment rights, asserting the right not to be discriminated against for contravening an exclusivity clause will require the prospective claimant to find the issue and hearing fees to pursue their rights. But that's a whole other story (see my December blog below)

What they say...

Superb speaker

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Bijal Patel, Barrister, former Solicitor, 23 years in legal practice, delegate on course on Advocacy in the Employment Tribunals
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