CIPD: “Lawyers warn of loopholes in crackdown, as employers face early 2015 compliance deadline. Government plans to ban zero hours contracts with exclusivity clauses may not be enough to stop employers tying down staff, it has been claimed.
An estimated 125,000 staff on zero hours contracts are prevented from seeking additional work with another employer, according to CIPD figures, and this week business secretary Vince Cable announced a crackdown on such exclusivity clauses.
But Ben Jones, partner and head of employment law at Darlingtons Solicitors, says less scrupulous employers could be tempted to offer work on limited one-week or one-month contracts which, while guaranteeing hours and pay, still tie employees into an arrangement of working for one employer, for short periods of time.
He said: “Employers used to the benefits exclusive zero hours contracts provide may start to offer shorter-term contracts.” This could create less certainty for staff because they wouldn’t be offered rolling contracts which would effectively class them as employees. He added: “Firms could offer a week’s work, then nothing the following week, then a week’s work again to avoid rules about whether these staff constitute employees. Employers shouldn’t be wanting to have their cake and eat it, but it could happen.”
Zero hours contracts have proved a contentious topic over the past 12 months. They have been widely criticised by unions, though others point to their mutual benefits: CIPD research found workers on zero-hours contracts were equally happy with their job, and were more satisfied with their work-life balance than those in regular employment.
The use of exclusivity clauses has been almost universally condemned, however, and Cable said this week said: “It has become clear unscrupulous employers abuse the flexibility these contracts offer to the detriment of the workers. We will work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero hours contracts as part of their workforce.”
The ban, he said, would apply both to new and existing contracts. A representative from the Department of Business, Innovation and Skills told People Management that bosses already employing staff on zero hours contracts will have to remove any exclusivity clauses by the time the legislation (announced as part of the Small Business Bill) goes through parliament, which is expected early next year.