A zero-hour contract is a type of employment contract in United Kingdom labour law between an employer and an employee, under which the employer is not obliged to provide any minimum number of working hours to the employee. In 2015, employers in the UK were prohibited from offering zero-hour contracts that prevented employees from working for another employer at the same time. In September 2017, the UK Office for National Statistics estimated that there were over 900,000 workers on zero-hour contracts, 2.9% of the employed workforce. In the UK, zero-hour contracts are controversial. Trade unions, other worker bodies, and newspapers have described them as an exploitation of labour. Employers using zero-hour contracts include Sports Direct, McDonald's and Boots.
Definition
A "zero-hour contract" is a type of contract between an employer and a worker under which the employer is not obliged to provide any minimum number of working hours, and the worker is not obliged to accept any work offered. The term "zero-hour contract" is primarily used in the United Kingdom. The employee may sign an agreement to be available for work as and when required, without specifying a particular number of hours or times of work. Under U.K. law, a distinction is drawn between a "worker" and an "employee," an employee having more legal rights than a worker. Whether a person working under a zero-hour contract is an employee or a worker can be uncertain; however, even in cases where the plain text of the zero-hour contract designates the person as a "worker", courts have inferred an employment relationship based on the mutuality of obligation between employer and employee. Zero-hours contracts provide basic social security benefits, including maternity/paternity pay, holiday pay, and health insurance. A zero-hour contract may differ from casual work.
History In the United Kingdom, under the National Minimum Wage Act 1998, workers on zero-hour contracts must be paid the national minimum wage for stand-by time, on-call time, and downtime. Before the introduction of the Working Time Regulations 1998 and the National Minimum Wage Regulations 1999, zero-hour contracts were sometimes used to "clock-off" staff during quiet periods while retaining them on site so they could be returned to paid work should the need arise. The National Minimum Wage Regulations require that employers pay the national minimum wage for the time workers are required to be at the workplace, even if there is no "work" to do. In the past, some employees working on a zero-hour contract have been told that they are required to obtain permission of their employer before accepting other work, but this practice has now been banned under UK legislation enacted in May 2015. In Autoclenz Ltd v Belcher, the UK Supreme Court delivered a judgment on workers employed under a zero-hour contract. Lord Clarke held, at paragraph 35, that in employment relations which are characterised by inequality of bargaining power, the written terms of a contract may not in truth represent what the contract in law was. In March 2015, the Small Business, Enterprise and Employment Act 2015 received royal assent. On a date to be appointed, Section 153 of the Act will amend the Employment Rights Act 1996, so that exclusivity terms in zero-hours contracts will no longer be enforceable, and regulations may specify other circumstances under which employers may not restrict what other work zero-hours workers can do.
Statistics As of September 2017, the Office for National Statistics estimated that there are over 900,000 workers on zero-hours contracts (2.9% of the employed workforce), up from 747,000 the previous year, with over 1.8 million such contracts (as some people may have more than one contract), with a further 1.3 million where no hours were worked. Some commentators have observed that the number of such contracts may be under-reported, as many people may be confusing them with casual employment, and may not be reporting them as temporary. The Chartered Institute of Personnel and Development (CIPD), based on a poll of 1,000 workers, reported in August 2013 that as many as 1 million workers in the United Kingdom, 3–4% of the workforce, work under the terms of a zero-hour contract. Based on a survey of 5,000 of its members, Unite, Britain's largest labour union, estimates that as many as 5.5 million workers are subject to zero-hour contracts, 22% of those employed privately. The survey, conducted by Mass 1, showed that zero-hour contracts were more prevalent in northwest England, among young workers, and in agricultural work. Often, workers said that holiday pay was illegally denied, and, in most cases, sick pay as well. The National Farmers Union, which represents farmers, supports zero-hour contracts as offering needed flexibility for tasks such as harvesting. According to CIPD research, about 38% of those employed under zero-hours contracts considered themselves employed full-time, working 30 hours or more a week. While 66% of those on zero-hours contracts were happy with the hours they worked, 16% felt they did not have an opportunity to work enough hours. About 17% of private employers used zero-hours contracts, while 34% of non-profit organisations and 24% of public employers did. Zero-hours contracts were frequently used in hotels, catering and leisure (48%), education (35%), and healthcare (27%). For domiciliary care workers, the incidence was reported to be as high as 55.7% of all workers during the period 2008–12. In 2011, zero-hours contracts were in use in many parts of the UK economy:
in the hotels and restaurants sector, 19% of all workplaces (up from 4% in 2004) in the health sector, 13% (up from 7%) in the education sector, 10% (up from 1%)
Employers Zero-hour contracts are used in the private, non-profit, and public sectors in the United Kingdom:
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