LAST month The Department for Business Innovation and Skills launched a consultation paper on zero hours contracts looking at issues of exclusivity and transparency. The consultation period ends on March 13.
The government aims to 'maximise the opportunities of zero hours contracts while minimising abuse and setting core standards which protect individuals'.
There is no legal definition of a zero hours contract in UK law. The terms of a zero hours employment contract often state 'the employer does not guarantee the individual any work, and the individual is not obliged to accept any work offered'. Despite concerns recently raised in the media, such contracts have been used by some industries for many years.
The Office of National Statistics' estimate for the fourth quarter of 2012 suggests around 250,000 individuals were on zero hours contracts, 0.8 per cent of total employment. A further joint study conducted by the Chartered Institute of Personnel and Development and YouGov in August 2013 estimates the total number of employees on zero hour contracts could be as high as one million.
Previous data from the Workplace Employment Relations Study in 2011 found the largest increase in the proportion of workplaces using zero hours contracts between 2004 and 2011 was in the hotel and restaurant sector and there was as marked growth of the use of these contracts in the education sector and the health sector.
For employers, the advantages are clear and include flexibility, as zero hours contracts allow businesses to hire staff while being able to adapt to changes in demand, for example offering more work when demand increases and being able to scale back when it decreases. Allowing businesses to recruit and grow with limited risk if the additional work anticipated fails to materialise.
Facilitating the retention of skills by allowing businesses to retain the skills and experience of older staff, who might wish to partially retire or have retired, on a casual basis. An employer may have made a significant investment in the individual over the years through training and the individual will have valuable knowledge of the company and its people.
Advantages for individuals include a greater autonomy over when, where and how much they work for; open up opportunities to enter the labour market and a stepping stone to other forms of employment; flexible family and retirement plans by allowing individuals to consider a wider range of flexible work patterns to suit personal and family needs.
The purpose of the consultation is not to look at the legality of zero hours contracts but rather to introduce appropriate safeguards.
Such safeguards are likely include prohibiting employers from preventing employees working for another employer while available 'off shift' and making the contractual terms clearer and easier to understand for employees.
At this stage it is difficult to know how the government will respond to the consultation and it may be a long time before any safeguards to this method of working are implemented.
What seems clear is that zero hours contracts are here to stay. Given the commercial advantages these contracts create for employers, it is unlikely this government (or any future government) would completely prohibit or significantly restrict the use of zero hours contracts as a method of working.
Peter Collyer is an employment solicitor at Boyce Hatton. For more information contact him on 01803 403403 or by email firstname.lastname@example.org