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Exclusive zero-hours contracts could be banned
by Susie Hughes at 13:50 20/12/13 (News on Business)
Companies could be banned from imposing exclusivity on zero hours contracts, but they will not be completly outlawed under new proposals by Business Secretary Vince Cable.
The controversial zero hours contracts are now the subject of a Government consultation which outlining proposals on ways to tackle the lack of transparency in the way zero hours contracts are currently being used and improve guidance for both employers and employees around their use.

However, the move against zero hours contracts is, once again,aimed at vulnerable workers who can be laid off at a moment's notice, yet prohibited from taking work with other 'employers'. And, once again, freelancers fear they could be caught up in regulations which crack down on some one else's vulnerablility yet inadvertently affect they way they work. (See: Zero-hours contracts have been unfairly demonised and oversimplified -Nov 13, Shout99).

Mr Cable did make it clear that the Government was not intending to ban them completely, but ensure that workers using them receive a 'fair deal'.

Mr Cable said: “A growing number of employers and individuals today are using zero hours contracts. While for many people they offer a welcome flexibility to accommodate childcare or top up monthly earnings, for others it is clear that there has been evidence of abuse around this type of employment which can offer limited employment rights and job security. We believe they have a place in today’s labour market and are not proposing to ban them outright, but we also want to make sure that people are getting a fair deal.

“Our research this summer gave us a much needed insight into both the positive and negative aspects of zero hours contracts. Our consultation will now focus on tackling the key concerns that were raised, such as exclusivity clauses and how to provide workers with more protection. We don’t think that people should be tied exclusively to one employer if it unfairly stops them from boosting their income when they are not getting enough work to earn a living. We also want to give employees and employers more guidance and advice on these types of employment contracts.

“Employers need flexible workforces and people should have the choice in how they work. But this shouldn't be at the expense of fairness and transparency.”

Freelancer group, the PCG, welcomed the intention that zero hours contracts will not be banned and that the issue of exclusivity clauses and abuse would be addressed. They viewed is as ‘an encouraging sign’.

PCG’s Chief Executive, Chris Bryce, said: “Clearly, businesses need access to flexible resource and zero hours contracts deliver that. However, restrictive handcuffs used by some employers smacks of exploitation. Flexibility has to work both ways an exclusivity clause is fundamentally against the spirit of flexible working.

“This announcement by the Business Secretary is an encouraging sign that the Government is on the path to recognising the importance of flexible working to the economy. Mr Cable’s words provide reassurance that any measures designed to stamp out exploitation of vulnerable workers will not negatively affect genuine independent professionals in business on their own account.

“The way we work in this country is fundamentally changing. In the flexible labour market that we have now, this route is not only available to the upper echelons of the market as it has been historically but also to young people, working mothers, and anyone who might choose this way of working as a viable alternative to permanent employment.

"With the growth of new industries such as digital technology, becoming an independent professional is no longer the preserve of the vastly experienced, highly skilled sectors of the workforce. We would urge the Government to ensure those choosing to work in this way are not confused with vulnerable workers.”

The 12 week public consultation will seek views on a range of proposals including:

  • Proposals to potentially ban the use of exclusivity clauses in contracts that offer no guarantee of work
  • New advice and guidance to improve transparency around the use of zero hours contracts for employers and employees.

The launch of the consultation follows a fact-finding exercise that was carried out over the summer by the Department for

A copy of the consultation document can be found at on the Government's website

Or you can respond to the BIS consultation via anonline questionnaire.

Key terminology
Exclusivity: This is where someone agrees to a contract that does not guarantee them a minimum number of hours and is stopping them from working for another company. This is described as an ‘exclusivity clause’. In certain cases this can mean that people were stopped from looking for work elsewhere particularly when they needed more hours to bump up their earnings. Feedback from employers themselves suggests awareness that there can be abuses that limit flexibility.

Transparency: There is no clear or legal definition of a zero hours contract and it can cover a number of working arrangements. This can lead to confusion and a lack of understanding on contract details and what it means for the individual. In some cases people were not aware of the fact that there was a possibility that they might not be offered work on a regular basis.

Uncertainty of earnings: The amount of money a person on a zero hours contract can expect to earn is dependent on the number of hours worked. This means that lower-paid workers people on a zero hours contract can find it hard to calculate their earnings and it can lead to concerns about how benefits might be affected.

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Susie Hughes © Shout99 2013

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