Business Secretary Vince Cable has called on business, unions and individuals to help identify and close potential loopholes in plans to ban the use of exclusivity clauses in zero hours contracts (ZHC).
The government wants to find out whether a minority of unscrupulous employers may attempt to circumvent the ban by offering contracts which could, for example, guarantee just 1 hour of work. This consultation seeks views on the best method to prevent this from happening, and asks people whether they think this route may be exploited and whether the government should take pre-emptive steps.
It also proposes options, such as civil penalties, that workers could use to seek justice if they are treated unfairly by their employer because they found work elsewhere while on a zero hours contract.
The consultation, launched today (25 August 2014) by the Business Secretary, follows the announcement in June 2014 that the government would ban the use of exclusivity clauses. Exclusivity clauses prevent workers on zero hours contracts from taking work elsewhere even when their employer provides no work.
Business Secretary, Vince Cable said:
We are tightening the screws on rogue employers who try to abuse workers on zero hours contracts. We are looking closely at any potential loopholes that could arise from a ban, to ensure that these are closed off and no one can get round the new law. We are also ensuring there is access to justice for workers treated unfairly.
The evidence shows that the vast majority of zero hours contracts have been used responsibly by many businesses for many years, but unfortunately we know that some abuse does take place. This is why we are bringing in new laws to ban the use of exclusivity clauses in zero hours contracts, which currently stop employees getting other jobs if they need to top up their income.
We want to give individuals the chance to find work that suits their individual circumstances whilst also giving employers the confidence to hire and create new jobs.
The government also announced that business representatives and unions would work together to develop sector-specific codes of practice to help guide the fair use of zero hours contracts, and that it would help improve the information available to individuals and employers on using these contracts.
The views submitted to the consultation will help inform the implementation the zero hours contracts section of the Small Business, Enterprise and Employment Bill.
Notes for editors
- The consultation on tackling avoidance on the ban of exclusivity clauses closes on 3 November 2014. More information on the consultation can be found at www.gov.uk/government/consultations/zero-hours-employment-contracts-exclusivity-clause-ban-avoidance) or BIS Citizen Space.
- The government launched a summer 2014 review into zero hours contracts in 2013. The review found:
- the use of exclusivity clauses which leave employees tied exclusively to 1 employer even if no or little work is available
- lack of transparency and information on the employment contract, leaving individuals unaware of their rights
- Following the summer 2014 review the government launched a consultation into the exclusivity and transparency of zero hours contracts. The consultation ran from December 2013 to March 2014. The government response to the consultation can be found here: www.gov.uk/government/consultations/zero-hours-employment-contracts
- The consultation into exclusivity and transparency received over 6,000 responses. The key findings included:
- over 83% supported a ban on the use of exclusivity clauses in zero hours contracts
- only 14% found existing information on zero hours contracts helpful, 42% found it very unhelpful
- Key facts on zero hours contacts:
- an exclusivity clause in a zero hours contract is when the employer prevents the individual from working for someone else, even though the employer does not guarantee any hours of work
CIPD statistics estimate that 9% of all those on zero hours contacts are on an exclusivity clause; BIS estimates that this could be 17,000 people or could be as high as 125,000
- the Office for National Statistics Labour Force Survey (August 2014) latest estimate - 622,000 people on ZHCs (less than 2% of labour market)
- Zero hours contracts provide an average of 24 hours of work a week
Acas offers some online guidance on zero hours contracts. Employees or employers that believe they may be using zero hours contracts and are concerned about employment rights can call the Acas helpline on 0300 123 1100 for free support and advice.