Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015

Baroness Burt of Solihull Excerpts

Monday 7th December 2015 Grand Committee

[Baroness Burt of Solihull (LD)]

I am grateful to the Minister for giving way. This is the first time that I have taken part in a Grand Committee. He said that pressure is put on people to comply, and an ordinary worker may find the legal redress a little confusing. Do the regulations contain a provision to deal with situations where emotional pressure is put on an individual who may not have an official exclusivity contract but it is understood that if they contravene the contract and go to work elsewhere they will not be asked to work again?

[The Earl of Courtown]

I think that, in a nutshell, the noble Baroness is talking about protection for the vulnerable worker. I cannot give her an answer at this moment but I will write to her.

Concerning the income threshold, during the last Parliament the Government announced the idea of extending the ban on exclusivity clauses to contracts that did not guarantee a set income threshold. We will now look at this aspect further, considering any evidence of avoidance of the ban. To date, the Government have seen no evidence of employers finding ways to get round the ban on exclusivity clauses.

The noble Lord, Lord Stevenson, asked why the self-employed are not covered. The exclusivity ban protects all employees and workers who have exclusivity terms included as part of their zero-hours contract—that is, a contract which does not guarantee paid hours of work. These provisions do not cover those who are genuinely self-employed and undertake work on a zero-hours contract arrangement. For example, a self-employed contractor might take up work offered on a zero-hours basis from a number of regular clients but remain self-employed. This is because self-employed individuals will negotiate their own terms as part of their contractual arrangements with their clients.

The noble Lord also raised the important issue of employment tribunal fees and said that they represented a prohibitive cost for those on zero-hour contracts. As in the case of any other complaint submitted to an employment tribunal, anyone who feels that they cannot afford to pay the associated costs can make an application for a fee remission—that is, to have the fees waived or reduced. An individual can apply for remission of the fee-paying stage and so would not be out of pocket. Complainants who are in receipt of universal credit and have less than £3,000 in savings and gross annual earnings of less than £6,000 would automatically qualify for remission of fees. Complainants will qualify for full remission of their employment tribunal fees if they have savings of less than £3,000 and are in receipt of certain qualifying benefits, such as income-based jobseeker’s allowance or income support. They may also qualify for full or partial remission if their household savings and gross income fall below or within a specified threshold.

The noble Lord also mentioned compensation. We do not believe that the regulations should stipulate the level of compensation to be awarded. This is a matter that the court should decide, given the individual circumstances of each case.

The noble Lord, Lord Stevenson, also mentioned the rights of those on zero-hours contracts and on other casual contracts. There is a misconception that those on a zero-hour contract do not have employment rights or have fewer rights than those on other types of contract. Everyone, regardless of contract type, has employment rights. The employment status of an individual will determine whether they are an employee or a worker; employees and workers have different employment rights. However, let me be clear that people working under a zero-hours contract have the same day one rights as any other worker or employee. When there is a qualifying period for certain rights—for instance, entitlement to maternity pay—they must meet this condition, just as with any other worker or employee.

I welcome the noble Baroness, Lady Burt, to the Moses Room. She asked whether emotional pressure could be taken into account. It would be a matter for the court to consider what the detriment is in each case.

Finally, I reiterate that the Government are committed to ensuring that exploitative practices identified around zero-hours contracts are eradicated, so that those on this side of the contract have a fair deal. The regulations are supported by the majority who responded to a consultation period on this matter. I commend the regulations to the Committee.