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Government to review zero-hour contracts

25th June, 2013

Initially introduced in shops, restaurants and hotels, before spreading to public services, the number of zero-hour contracts offered by employers has risen substantially since 2007.

A zero-hour employment contract means the employer is not obliged to provide a minimum amount of work but the worker is obliged to be available for any work offered. For some people, this is convenient as it creates flexible working opportunities but Business Secretary, Vince Cable has raised concerns that some businesses are abusing the contracts, which create little protection for workers in terms of certainty over hours of work and pay.

Mr Cable said: “While it’s important our workforce remains flexible, it is equally important that it is treated fairly. This is why I have asked my officials to undertake some work to better understand how this type of contract is working in practice today.”

Trade unions have also criticised the use of zero-hour contracts. Sarah Veale, head of equalities at the Trade Union Congress (“TUC”) recently said “the flexibility of zero-hour contracts is by no means beneficial to employees with no guarantee of any money on any given day, inability to plan childcare and/or claim benefits or take up employment elsewhere”. Ms Veale also went on to warn businesses of the long-term implications of using zero-hour contracts saying “staff are unlikely to be committed to their employer and in stronger economic times will not consider such contracts”. Additionally there is the concern that by spending little time in the workplace, staff members only receive very basic training resulting in less productivity. With these reasons in hand, the TUC believes “we have a national minimum wage in the UK, for all the right reasons. We now need a minimum hours threshold for employment contracts.”
While an outright ban on zero-hour contracts is unlikely to take effect as some workers do prefer to be on call and to work only occasionally, safeguards may be put in place to reduce uncertainty in this area and provide protection to those vulnerable to this situation.

Shadow Health Secretary, Andy Burnham, had previously urged the Labour party to pledge a ban on the use of zero-hour contracts which if successful, could in turn improve potential for a living wage as supported by Labour leader, Ed Miliband.

For information or advice in relation to correctly implementing contracts of employment, please contact Claire Brook on 01244 405575 or send an email to [email protected].

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