I was intending to write a blog post about the election and employment law, but the announcement this morning by Labour of its plans in relation to such contracts has prompted this post.
My Personal Perspective
I write this post from the perspective of someone who represents employees on zero hours contracts trying to establish employment status, drafts contract claims for employees on zero hour contracts, represents employers facing claims by employees on zero hours contracts and drafts zero hours contracts for employers who request them. I have also been on a zero hours contract myself. Whilst in school, at university and applying for pupillage I was on a zero hours contract working weekends and holidays to earn extra cash. The contract was initially issued by a local authority and subsequently continued when the service was contracted out.
A Good Thing?
The arguments in relation to the desirability of zero hours contract have been well rehearsed. For some individuals and businesses they represent the best way for having a flexible relationship that meets the need of both parties. This stands in contrast to a situation whereby someone wants to work full time, yet only finds out on the day that they are not working, sometimes even after they have travelled to work.
It is important to pause at this stage to note that one of the reasons that employment law exists and Parliament legislates through statute to intervene in matters of contract which would otherwise be the preserve of the common law is the unequal bargaining position inherent in the employment relationship. At the same time, there needs to be a degree of market reality. Businesses need to be able to respond to changing demand and wages do need to have a correlation with the availability of employees of suitable skills.
Various statistics (700,000-900,000 workers for example) have been bandied about as to whether these contracts are more prevalent these days. I suspect that they are, but at the same time I receive far more requests to draft employment contracts with fixed hours than I do without fixed hours. Sometimes when I receive a request from an employer to draft a contract with no fixed hours and I explain the implications of this in terms of the workers ability to turn work down, they indicate that they would actually prefer a different contract.
The coalition sought to legislate to ban ‘exclusivity’ clauses in any zero hours contract. I must confess that in ten years, I had never seen such a clause in a zero hours contract. However, subsequent media reports indicated that a major national retailer did use such clauses. Given the employers ability to dismiss within the first two years of employment without a potentially fair reason, my view is that any argument over such clauses is largely academic.
The Proposal By Labour
The proposal by Labour is to provide an individual on a zero hours contract the right to request a ‘regular contract’ after twelve weeks. Indeed whether this is a right to ‘request’ or a right to be ‘provided with’ differs depending on the media report that you read.
Labour estimate that this will affect 90% of workers on zero hour contracts.
It seems that if this proposal is to ‘ban’ or ‘curtail’ zero hours contracts it presents a number of problems. If Labour wishes to achieve its objective (rightly or wrongly) then the following questions need addressing:
- What is a ‘zero hours contract’? If an employer were to guarantee the employee sixty seconds or one hour of work, is that a zero hours contract? Probably not.
- What counts as ’12 weeks’? What amounts to a break in that period? If the work is unskilled, what is to stop the employer simply engaging new staff every ten weeks?
- What is a ‘regular contract’? How many hours must the contract provide for in order to be a ‘regular contract’?
- If the argument becomes that the ‘regular contract’ must reflect the hours worked by the worker, how is the hours worked by the worker established?
- The right not to be unfairly dismissed accrues after two years of service. Will a new automatically unfair reason for dismissal be created? Will that right attach to those of worker status?
- What about those who genuinely want a flexible relationship? If you provide an opt out, how do you stop that opt out defeating the purpose of the legislation?
The Real Problem
Of course all of this pales into insignificance when compared to the real issue, namely access to Employment Tribunals. Yes, I am returning to this old chestnut but it really is a far more pressing issue than zero hours contracts. You can see why from a tactical perspective Labour is running with zero hours as they are trying to gain traction on this as a major election theme that plays with the public, but the practical reality is that in order to bemeaningful any right must be realistically enforceable. Labour has played some mood music on Tribunal fees, but the position remains characteristically vague. In contrast, the Conservatives have been positively enthusiastic about Tribunal fees, making a number of jokes about their impact and putting off a promised review into their effect.
Any myth that the drastic reduction in claims has been as a result of vexatious claimants no longer bringing their claims has been debunked at least by people who understand such things (e.g. this excellent blogpost by Michael Reed) ) . You will still see national media reports that say something different and it appears that this message has not got through. For another excellent blogpost on this point see The Minister That Time Forgot by Richard Dunstan .
Furthermore, when it came into power in 1997, Labour legislated shortly thereafter to reduce the qualifying period for unfair dismissal to one year. The coalition increased the period to two years. I have heard no such commitment from Labour to again reduce the period to one year, most probably because they fear being labelled in the pocket of unions. The next government should legislate in this area. Any employer is in a position to know whether an employee is suitable for the job after one year. As I have written previously, the notion that the difference between the right attaching to one or two years affects job creation is farcical. No reasonable employer will say “I will not create this job that my business needs because this employee accrues basic rights after two years not one.”
I return to the point that any debate in the national press reflects ‘big picture’ ideas that don’t necessarily translate into reality. All political parties are guilty of it, you can understand why, they want to deal in ‘themes’ rather than specifics. This isn’t a problem unique to employment law, anyone who has some knowledge in a specific area and observes that subject entering the national debate is often left frustrated. Perhaps the problem is our broken politics. Its an easy point to make but a difficult problem to solve.