zero
hour contracts
“Zero hours”, or “nil hours” or “casual” or
“bank” contracts are colloquial terms for
an employment contract under which the
employee is not guaranteed work and is paid
only for the work they actually carry out.
There is no standard format which all
such contracts follow. Generally, they do
not oblige the employer to provide work
for the employee but, of late, they may
oblige the employee to accept any work
that is offered.
These use, or abuse, of these types of
contracts were one of the main agenda
items at this year’s TUC conference. It
was also the cause of much debate
at the Labour Party Conference held
in Brighton. The suggestion in many
headlines is that employers are
exploiting workers who are desperate for
any kind of work.
The Resolution Foundation concluded
that workers on such contracts earn £9
per hour on average compared to £15
for other workers. Critics maintain that
there is not enough financial stability and
security for those with responsibilities, as
they run the risk of unpredictable hours
and earnings. Frances O’ Grady, General
Secretary of the Trades Union Congress
has called on the coalition government to
“stop stripping workers’ rights”.
John Cridland, Director General of the
Confederation of British Industry said
those complaining about these contracts
need a “reality check”. He suggested
that they had assisted in keeping the
number of unemployed workers down.
Mark Bateson, Chief economist of the
Chartered Institute of Personnel and
Development (CIPD), joined the debate
by saying that it was “too simplistic to
dismiss such contracts as bad for the
labour market or as the tool of greedy
private-sector employers.”
Mark Bateson has a point, zero hours
contracts can be especially useful for
industries where the work fluctuates
unexpectedly. The employer cannot
guarantee work all of the time but would
like to know that they can call on known
workers when the need arises. Such
arrangements may be ideal for retirees
and students, or parents who want
occasional earnings and are able to be
flexible about when they work.
From an employment law point of view
there is a need to monitor the operation
of these flexible working arrangements.
Labelling a contract in a certain way
does not necessarily do the job. It is how
the contract actually operates that with
determine the legal position. The key
issue is whether the individual worker is
in fact an employee.
Yes, there is a difference between
workers and employees from a legal
point of view. It will be those who in are
in the latter category that will have more
rights under law. Workers have fewer
rights but will still be covered by key
strands of legislation such at the Working
Time Regulations.
Legal action has recently been brought
against SportsDirect.com for abuse of
zero hours contracts. Elizabeth George,
a barrister for the claimant argues:
“There was no practical difference
between the obligations put on my client
by the company and those placed on fulltime staff.” In other words, the claimant
was working in the same way as any
employee engaged under a permanent
contract with set hours of work that could
not be reduced at will.
If an employer wants it all their own
way with the worker obliged to work
whenever asked but without there being
an obligation to provide work then there
is an obvious imbalance. For there to be
an employment relationship there must
be mutuality of obligation. The employee
is obliged to do the work that is offered
(attend at the agreed time and do what
is asked) but in return the employer is
obliged to provide it.
Where there is no obligation on
someone to accept work when offered
then this can be described as casual or
bank work. The worker could be on a list
held by the employer and asked to work
as and when required. If the worker says
that they are not available at that time
then the employer moves on to the next
person on their bank list.
There are no repercussions as the
worker is entitled to turn down the work
and the employer has no expectation
that the worker should accept the work.
This is a truly flexible system and suits
those workers who need that sort of
flexibility. It is good for the employer as
the lack of any ties means they do not
have the responsibility of employing
someone between pieces of work.
What we are seeing is now is people
being pressured into a one way
relationship. They feel they have to
accept the work otherwise they will lose
their job. However, that job promises
them nothing. The disadvantage for the
employer is that employment relationship
continues even during times when no
work is actually performed.
However, this, for many, is not seen as a
di