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Hewett's Legal Corner - August 2014 #16

Wider Implications of Government Proposals

Zero hours contracts are able to provide flexible employment opportunities that suit most of those who work under them, in practice providing an average of 25 hours work per week.
The recent Government consultation focused on the use of exclusivity clauses and the lack of transparency and has resulted in the Small Business, Enterprise and Employment Bill 2014-2015 which was published on 25 June 2014.

The proposal to ban exclusivity clauses in zero hour contracts received much publicity and support but in fact it is only expected to benefit about 125,000 workers out of an estimated 1.4 million workers working under such contracts.

The proposals however have potentially far wider implications than mentioned above. Until the Bill was published there had been no legal definition of a “zero hours contract”. The definition contained within the Bill,

“where there is no certainty of work from the employer, but the worker is expected to be available for work if or when it is offered”,

is ambiguous and has the potential to lead to litigation. In addition however, the Government has reserved to itself the power to extend the definition of zero hours contracts to cover other forms of flexible working not currently covered by the proposed ban. This may include those who work below a minimum number of hours or who earn less than a certain amount.

Whereas the Government is working on a new code of practice to be available by the end of 2014, until there is certainty as to what contracts are covered by the ban, employers may stop offering flexible contracts if they are unable to protect their legitimate interests through exclusivity terms.

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