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Zero Hours contracts: Government announce review of employment status

The Government has launched a review to help clarify the status of workers.

One of the main issues arising from zero hours contracts is the confusion for both parties over employment status of the individual – are they an employee, a worker or even self-employed?

It is important to know into which category the individual falls, as this will determine the level of legal protection the individual has. To give one example, only employees (who are afforded the most protection) acquire the right not to be unfairly dismissed after 2 years, workers and the self-employed do not.

At present, the process of determining the status of zero hours workers can be complex and involves an analysis of multiple factors such as the level of control the employer has, whether personal service is required, whether the individual is obliged to accept work if offered and so on.

Even where there is a clear agreement in place, what actually happens in practice may not reflect the agreement and can become the subject of a later challenge from an individual (most commonly upon dismissal). Commonly, a definitive answer can only be given by an Employment Tribunal.

The Government hopes to make matters clearer, so that the individual and employer are clear of their rights from the outset of the relationship and prevent matters reaching the Tribunal. It is expected that the Government will present their initial findings by the end of 2015 and will submit recommendations to ministers in March 2015.

This announcement follows the Government’s plans to make exclusivity clauses unenforceable in zero hours contracts. This will ban employers from restricting those employed under zero hours contracts from working for other employers. These proposals are currently at an early stage in the legislative process, with consultations still taking place.

Zero hours contracts are a “hot topic”, particularly in advance of next year’s general election, with the main parties seeing the subject as an election tool. It is certainly an area to watch over the next year and it will be interesting to see what changes take place, subject to any political change.

To read BIS’s press release, please click here.

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