18th April 2014

Zero Hours, Zero Rights?

The Scottish Affairs Committee has recently published an interim report on the use of zero hours contracts in Scotland.

Zero hours contracts are often used by employers who want to engage staff on a flexible basis without binding themselves to certain obligations.  Zero hours contracts are not defined in law.  Typically, a worker will sign up to be available for work as and when required although a zero hours contract places no obligation on the employer to actually provide work.  The worker will be paid only for the hours worked which are generally not guaranteed.

The report described the use of casual labour as alarming and branded the Government’s consultation over zero hours contracts as “too narrow”.  Ian Davidson MP, who chaired the Committee stated: “The overwhelming majority of zero hours contracts are abusive and exploitative and should be abolished”.

The report continued: “It is clear that zero hours contracts and other forms of casual labour can benefit both employers and workers but our inquiry has shown that, too often, the relationship is unbalanced, leaving the employer with all of the flexibility and few costs and the worker in fear of dismissal and denied access to due rights of employment”.

The report found that 20 per cent of those engaged under zero hours contracts are paid less than their permanent counterparts with around 5 per cent being paid below the National Minimum Wage! It described the Government’s assertion that low paid workers could challenge abusive employers through the courts as “fanciful”.

The overriding conclusion was that in the vast majority of cases, zero hours contracts should not be used.  The committee recommended that zero hours contracts must only be used if the employer could objectively justify the use.

It will be interesting to see how the Government reacts to the report and whether any legislation is introduced to regulate the use of zero hours contracts.  In the meantime, no doubt zero hours contracts will remain prevalent.

Jack Boyle
Senior Solicitor – Employment Law

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