Edging towards a transparent zero-hours contract
After a recent agreement to settle with an ex-employee, the sports retailer, Sports Direct, has been forced into advertising the terms of their zero-hours contracts. This has been welcomed by a number of campaigners who believe the changes are a step in right direction towards their ultimate aim: the banning of these controversial contracts. The agreements states that the retailer will have to make clear in job adverts, contracts and staff rooms that zero-hour contracts do not guarantee work, sick pay or holiday pay under the controversial terms.
Reports in the press this week indicate that trade unions and campaigners are planning protest against zero-hours contracts and low pay at selected Sports Direct stores.
The business secretary, Vince Cable, made his views on the subject public, suggesting that these contracts do have a place and work well in certain circumstances, especially for students and older workers; although he admits there remains a lot of confusion surrounding the contract’s purpose and fairness. He is quoted as saying that “For many workers this is a perfectly sensible arrangement. But a lot of people on the contracts aren’t sure what their rights are.” The government has made it their intention is to make zero-hour contracts more transparent to ensure that workers know what their rights.
My feelings are that it would be difficult to outlaw zero-hour contracts, despite recent demonization, and that, in particular situations, zero-hour contracts do have a place in the workforce. However it is important that employers are made aware that this type of contract does not exempt them from paying statutory entitlements.
Furthermore, employers need to be clear on the reasons as to why they require a worker to be on a zero hours contract and should not try to make this an exclusive arrangement, especially if there is limited work available.
Employers will also need to be aware that, although a worker is on a zero-hours contract, when they start to work regular patterns this could imply fixed hours and potentially permanent employment status. Recent case law has stated that regular over time would count towards holiday pay, and those employers who take workers on a limited hours contract in an attempt to reduce the holiday pay cost are now required to take this regular overtime (additional days worked) into consideration when calculating holiday pay.
Zero-hours contracts is a provocative subject that shows no signs of going away, particularly in the run up the next year’s election. The business secretary, Vince Cable, has warned “unscrupulous employers” that he plans to ban clauses in zero-hours contracts that prevent workers from accepting shifts with more than one employer, therefore making it easier for workers to secure their financial security. Likewise, the Labour party has pledged to give greater rights to staff who have been on the contracts for longer than six months.