Nikki Duncan
Posted on 7 May 2015

Zero hours contracts – what are the likely legal constraints post-election?

Zero hours contracts allow employers to hire staff with no guarantee of work.  Staff work only when needed, often at short notice, making it difficult to plan availability, and in particular childcare cover.

Whilst the main political parties hotly dispute the statistics, there has undoubtedly been a marked increase in the use of zero hours contracts over recent years, and some employers (e.g. Sports Direct) are again in the news over there, allegedly oppressive, misuse of such contracts.

As a result, all three of the main political parties have pledged to curb the more abusive use of such contracts.

If the Conservatives get in again, they are likely to prefer a light touch, curbing use of the more unfair types of such contracts. They will bring into force Section 153 of the Small Business Enterprise & Employment Act 2015, which will make exclusivity clauses in zero hours contracts unenforceable.  Such clauses are oppressive, since they tie the worker to a particular employer, whilst preventing them working elsewhere.  Iain Duncan-Smith has also recently suggested a rebranding exercise, to describe zero hours contracts as 'flexible hours contracts', although normally that terminology is reserved for other types of flexible working arrangements.

The Labour party on the other hand has signalled they would go further.  They have said they will restrict the 'exploitative' use of zero hours contracts by ensuring that workers who work 'regular hours' in their first twelve weeks of employment are given a 'regular contract'.  At first sight this therefore seems similar to agency worker protection.  

The Labour party have also said they will introduce new legal rights for workers on zero hours contracts, designed to prevent employers forcing workers to be available at all times, and/or cancelling shifts at short notice without compensation.  

Whatever the exact legal curbs, they may well be accompanied by further guidance from ACAS on best practice,& template contracts. This undoubtedly would be helpful, since there is currently much misunderstanding about the legal status, and rights, of those working on fixed term contracts, the vast majority of whom will be accruing statutory employment protection rights.

In the meantime, it may be as well for manufacturers to review any existing contractual arrangements which might be affected, to consider the impact of likely curbs, and plan accordingly.  A more detailed review can then follow once the final shape of the likely post-election coalition, is known.