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What Employers Should Know About Zero Hours Contracts

Use of Zero Hours Contracts on the Rise

According to the Office For National Statistics, the number of workers on zero hours contracts has increased by 20% in a year and there are now 903,000, or 2.9% of the employed workforce on zero hours contracts.

Zero hours contracts provide much needed flexibility to employers, particularly those in the retail, leisure, hotel and care sectors, but many opting for this alternative working arrangement are unaware that after the Small Business, Enterprise and Employment Act received Royal Assent on 26 March 2015, two new sections, 27A and 27B, were inserted to the Employment Rights Act 1996, exclusivity clauses in zero hours contracts became unlawful and unenforceable.

Exclusivity clauses unenforceable

Section 27A(3) of the ERA 1996 renders unenforceable any provision in a zero hours contract which prohibits the worker from either of the following:

  • Doing work or performing services under another contract or under any other arrangement.

  • Doing work or performing services under another contract or under any other arrangement without the employer's consent.

Section 27A(4) provides that section 27A(3) should be disregarded for the purposes of determining whether a contract is a contract of employment or other worker's contract

Zero hours contract: definition

For the purposes of this exclusivity ban, a zero hours contract is defined as:

"A contract of employment or other worker's contract under which (a) the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker, and (b) there is no certainty that any such work or services will be made available to the worker." (Section 27A(1), ERA 1996.)

An employer makes work or services available to a worker if the employer requests or requires the worker to do the work or perform the services (section 27A(2), ERA 1996).

The Explanatory notes to the SBEEA 2015 confirm that new section 27A will apply to existing zero hours contracts as well as those which are entered into after the new section comes into force.

How EmployEasily Legal Services Can Help Employers

As specialists in all areas of employment law and HR, the team at EmployEasily Legal Services are well placed to provide Employers with employment law advice and HR support, including the drafting or updating HR policies and/or contracts of employment, introducing new HR policies to their employees and providing on-site support in any staff consultations, meetings or hearings.

Contact us today to find out how EmployEasily Legal Services can help you prevent problems and protect your business!

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