Progress for 38 Degrees and Leigh Day on Zero Hours Contracts

zero digital clock

The zero hours controversy rumbles on, with politicians of all hues determined to show that they are ‘very concerned’ and that ‘something must be done’. However, as is often the case, it seems that they find it easier to identify a problem – low paid workers being exploited – than to propose a solution.

Leigh Day has been working with 38 Degrees to challenge the abuse of zero hours contract workers. We believe that, depending on how a zero hours contract is operated, employers using these contracts will already be in breach of existing legislation. This is the basis of our claims against Sports Direct on behalf its zero hours employees.

Alongside this legal action, we are also seeking government action to prevent abuse of zero hours contracts for all workers. We recently met with officials from the Department for Business Innovation and Skills (BIS), along with members of 38 Degrees who had first-hand knowledge of how miserable life can be working under a zero hours contract.

Their experiences highlighted how easy it is for employers to exploit zero hours contract workers. They talked about how they could be asked to come into work, only to be sent home on arrival, having paid substantial travel costs.

Others had faced disciplinary action for complaining about their lack of hours. There was one instance where a woman had been told to move to a zero hours contract or face redundancy. As well as other examples where individuals simply did not know that they would have no guaranteed hours when they signed up for a role.

Whilst an individual may genuinely want the flexibility of a zero hours arrangement, it was clear that for these individuals, and many of the people they worked with, they had not chosen to be on a zero hours contract. For them, ‘flexibility’ actually means stress and job insecurity.

It was encouraging to see that BIS appears to have listened and taken their comments on board. BIS’s statement, released on Tuesday, highlighted four key areas of concern, all of which were raised in our meeting. These were:

1. Exclusivity: where a contract does not guarantee a worker a minimum number of hours, yet also stops that individual from working for another company.

2. Transparency: there is no clear or legal definition of a zero hours contract – 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 are not aware of the fact that they may not be offered work on a regular basis.

3. Uncertainty of earnings: the amount of money a person on a zero hours contract earns depends on the number of hours worked. BIS states that this means zero hours workers may find it harder to calculate earnings, which could lead to concerns about how benefits might be affected. We also know that zero hours workers can struggle to take out mortgages or other loans, preventing them from buying a house or even a car.

4. Balance of power in the employment relationship: there can be penalties if workers do not take hours offered, even if they are offered at very short notice and do not suit the individual. This results in a climate of fear that a person is less likely to be offered regular work in future if they failed to accept the hours on offer.

Of course, the all-important question is what BIS will do to address these problems. Whilst companies such as Sports Direct may already be in breach of existing legislation, in other cases, workers may find themselves with little redress without further government action.

We are therefore pleased that BIS has also announced a public consultation on zero hours contracts to focus on how to tackle the problems it has identified. This consultation was one of the primary aims of our meeting with BIS.

Of course, legislating to prevent these abuses may not be easy, given the wide range of arrangements that are referred to under the umbrella term of ‘zero hours contract’.

Companies may also try to get around any legislation by providing a small number of fixed hours per week and leaving the rest to be dealt with as ‘overtime’. There are ways around these problems – for example, Ireland’s legislation protects people who work, in any week, for less than 25% of the hours for which they have to be available.

In any case, this is precisely why a consultation is a good idea – we will all have an opportunity to suggest solutions to the problems of defining the contracts and how to legislate against exploitation. Participants in the consultation can also address any unintended consequences of new laws. There are cases where a zero hours contract is necessary and desirable for both parties and new legislation should not prohibit these.
Although there is a long way to go, we are cautiously optimistic that this is the first step to stop the abuse that many zero hours workers face.

Nigel Mackay is a lawyer in the employment law team at Leigh Day

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Filed under Employment, Zero Hours

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