This is how we can ban “Zero Hours” contracts

The use of Zero Hours Contracts has reached epidemic proportions with estimates of over one million workers tied to them. “Zero Hours Contract” is not a legal term, but ZHC is a convenient shorthand for contracts where a worker is only paid for work actually performed but must be available for work and prohibited from working for other employers.

As Chuka Umunna has said, the huge spike in the use of ZHCs is a key feature of rising insecurity in Britain today. A recipe for exploitation. Condemning workers to insecurity: unable to plan, to budget, to arrange childcare. No guarantee of work and the constant fear that no work will be offered or the employer will say they are no longer needed.

Employment law can be used to tackle this. Which is why it is legitimate, legally and politically, to seek “A Ban On Zero Hours Contracts” and not necessary to be unduly cautious about doing so.

It is welcome that, in his speech to the TUC, Ed Miliband committed to act. He pledged that the next Labour government would ban zero hours contracts which require workers to work exclusively for one business or to be on call all day without any guarantee of work; and also stop zero hours contracts where workers are working regular hours but denied a regular contract.

This was reinforced by Chuka Umunna in the Opposition Day debate in the Commons where he also said that Labour would introduce a code of practice for use of zero hours contracts.

MPs of all parties condemned the exploitation of workers through zero hours contracts, notwithstanding the ludicrous suggestion by Tory Guy Opperman that his experience as a highly-paid self-employed barrister not tied to any one employer was comparable to that of a worker tied to an employer on a zero hours contract. Despite the degree of consensus, Vince Cable’s only answer is a consultation exercise starting in November which will take “several months”.

The legal tools exist to tackle zero hours contracts by tackling the three issues highlighted by Labour: exclusivity; on call; and regular hours.

Exclusivity clauses require the worker to be available for work and prohibited from working for another employer. These restrictive covenants stop the worker from working. Courts take a tough line on this and will reject a clause which is unreasonable and not justified. A clause which requires a worker to be available at all times and which prevents them working for anyone else, without any guarantee of work or pay, should be outlawed. As Ian Murray said in the Commons debate, there is no mutuality of obligation in those contracts and this needs to be dealt with.

Work  in the National Minimum Wage Regulations is not just time when a worker is working. It also covers “time when a worker is available at or near a place of work for the purpose of doing time work and is required to be available for work”, except where the worker can be at home. This should be extended to include time when the worker is required to be available for work and is prohibited by the contract from working for another employer. This would have the effect of those periods being included in the calculation of the minimum wage. In practice this would mean that the employer would limit those periods when the worker is “on call” (similar to arrangements in the health service). Taken together with banning exclusivity clauses, this would mean workers are able to manage their time and take other work at other periods.

Extending Rights to workers on ZHCs can be done under the Employment Relations Act 1999, which permits the government to confer rights on individuals of a specified description. This would enable a Labour government to extend existing statutory rights to ZHC workers and to fight the rights to the circumstances. This could include a requirement, as with fixed term contract and temporary and agency legislation, to issue a contract for defined hours after a certain period of work. Every contract must include “any conditions relating to hours of work (including any terms relating to normal working hours)”. This should be strengthened to require a minimum number of hours of work and a maximum number of hours when additionally required to be available for work.

Tackling insecurity

Ed Miliband told the TUC he is committed to delivering security, not insecurity, at work. This is best achieved by protection for the whole workforce, not just through individual rights individually enforced.

As Frances O’Grady said in her first address to Congress as General Secretary of the TUC, this requires fair pay with new wages councils to back it up. A similar point was made by Tom Watson in the Commons debate. This provides the framework for unions and employers to negotiate and achieve enforceable  agreements on fair pay, including the definition of working hours so that abuses such as zero hours can be tackled. In this way, not just a Living Wage, but a fair wage, can be delivered.

Ending Zero Hours Contracts is a step towards building a new world of work, based on fairness not insecurity, and the tools are there to achieve that goal.

Stephen Cavalier is the Head of Thompsons Solicitors