Re: Winter 2013/14 - Page 65

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