Zero-hours Contracts

Jenny Willott Excerpts

Wednesday 25th June 2014 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

Last summer, the coalition Government conducted an informal information-gathering exercise on zero-hours contracts in response to concerns about abuse of these contracts by a small number of employers.

Following that review, on 19 December 2013 the Government launched a public consultation on zero-hours contracts. The consultation closed on 19 March and received a record number of responses—over 36,000. Responses came from businesses of all sizes, charities and social enterprises, unions, union representatives and individuals.

We sought views on a number of issues including banning exclusivity clauses in zero-hours contracts, whether a code of practice should be introduced covering the fair use of exclusivity clauses in zero-hours contracts and these contracts generally, and how useful respondents found existing information, advice and guidance on these contracts. The consultation found:

The overwhelming majority of respondents, 83% of responses, supported a ban on exclusivity clauses in zero-hours contracts.

Many respondents felt that a code of practice focusing solely on the fair use of exclusivity clauses would not go far enough to tackle potential abuses. They wanted Government to develop a code of practice covering all aspects of the fair use of zero-hours contracts.

In relation to the quality of existing information, advice and guidance on these contracts, 42% of respondents said the current guidance was “not helpful”. Only 14% said they found existing guidance “very helpful”. This clearly demonstrates that more should be done in this area.

As a result, today, through the Small Business, Enterprise and Employment Bill, we will be introducing legislation which stops abuses of vulnerable workers who work under zero-hours contracts:

We will be banning the use of exclusivity clauses in contracts which do not guarantee any hours. This will ensure that individuals will be free to look for work elsewhere to help boost their income if they so wish.

We will also be introducing provisions via the Bill which provide a power which will allow avoidance of this ban to be dealt with. We will be consulting further on the best mechanism to tackle avoidance of the ban and the issue of redress should this law be broken.

Government will now work with business representatives and unions to develop a code of practice on the fair use of zero-hours contracts; and

Government will also work with interested parties to review existing guidance and improve information available to individuals and employers on using these contracts.

These measures will allow individuals on zero-hours contracts to seek additional work, if they choose to, and ensure that no employer can tie down an individual when they make no reciprocal commitment to provide that individual with any guaranteed work.