Is Your Staff’s Time At Your Mercy?

Time & MoneyEmployers thrive on ‘Zero Hours’ contracts, employing skilled workers without guaranteed working hours.  Great!  You have employees on tap but you only need to cough up the money if there’s any work.  Who doesn’t want that flexibility, even if the UK economy has risen above pre-crisis peak, with the GDP rise by 0.8%.  It’s all good – your employees signed the contract (regardless of whether they were aware that they were on a Zero Hours contract).  If there’s no work throughout the week or even month, you still have your employee at hand because the law allows it and because the employee is at your disposal – you’re under no obligation to offer a minimum of working hours, and in any case, you pay them SSP and holidays.  What is more, you probably insist on exclusivity, thus preventing the employee from getting work elsewhere and guaranteeing their availability at any given time.  All good as far as your company is concerned – no extra costs, employees can come and go as you please and it’s all healthy for the economy growth.  Ah, but what about the employee?

In comes Vince Cable to the rescue of … whom?  Disparaging reactions to the ‘exclusivity’ clause on Zero Hours contracts prompted Cable to look into the contracts, particularly the exclusivity clauses.  And why?  Some employees don’t even know they’re on a ‘Zero Hours’ contract until their working hours and indeed their pay got reduced without any notice.  Some employees turn up at work only to be sent back home, regardless of the travel expense and time, whilst employers refuse to allow them to seek work elsewhere in order to balance the books at home.  Employees who are prevented from getting work elsewhere, whilst on a Zero Hours contract, have their hands tied behind their backs.  They might be entitled to holiday and sick pay but, they also have inconsistent income if any at all.  Benefits are not an option because technically, they’re not unemployed.  There’s really no clarity from the employers and employees’ perspective – no good practice guidance at the moment, so the Business Innovation and Skills Secretary announced that the government is looking at ways to remedy the situation, particularly the ‘exclusivity clauses’.

What the government has to weigh up:

  • Is the contract fair and to whom?
  • From the company’s perspective: very much cost effective – company continues to run on budget, should any short falls arise.
  • From the employee’s perspective: how is the short fall going to compensate living budget?  In other words, “How am I going to pay my rent, or pay for transport to get to work, if the company I work for on a ‘Zero Hours’ contract, doesn’t give me enough work this month?”

In the long run, is the present situation helping the economy in anyway?  Will employees terminate their Zero Hours contracts (which include exclusivity clauses) and seek work elsewhere?  Before the law is passed and you are no longer able to honour those signed contracts because, your company is effectively breaking the law, should you not review those Zero Hours contracts, particularly those ‘exclusivity clauses’, and be prepared for new employment legislations? By Sandra Garcao


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