There has been a lot of press coverage recently with regard to zero hours contracts with a view that many employees are exploited under these contracts creating circumstances where they may not receive any work or pay under their contract but be prevented from working elsewhere to gain income.
Secretary of State Vince Cable has said that there will be a consultation launched later this year to explore how to tackle any abuses, particularly with regards to exclusivity.
The key causes for concern are:
Exclusivity – Employees are not guaranteed a minimum number of hours and can be prevented from working for other employers. It has been mooted that employees should be able to claim benefits during any downtime but it will be interesting to see how this can or will work in practise.
Transparency – There is no legal definition for zero-hours contracts and no clarity that it may cover a number of working arrangements.
Uncertainty of earnings – Due to the uncertainty about the number of hours worked.
Balance of power in employment relationship – Many employers felt that they would be penalised if they do not accept the hours offered by the employer.
The good news is that the language being used in the press does not appear to send out the message that the Government will look to do away with these contracts. For small businesses they are an invaluable tool to help create flexibility to meet business demand without increasing costs significantly where the demand is not constant.
It looks like, for now, the Government is committed to keeping these contracts – but only time will tell!
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