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Zero hours contracts consultation

The Business Secretary, Vince Cable, has launched a consultation into the understanding and use of zero hours contracts.

Official figures suggest that there are 250,000 people employed under zero hours contracts, which offer no guaranteed hours or pay and are typically used for low-paid, on-call workers. The Chartered Institute of Personnel and Development has said the figure could be closer to one million.

Mr Cable said such contracts “have a role in a flexible labour market” but said the Government’s own research last year uncovered concerns around:

  • The use of exclusivity clauses that prevent zero hours workers working for other employers
  • A lack of clarity and information about the exact terms of zero hours contracts
  • The level of uncertainty that zero hours workers said they experienced.

The consultation will run until 13 March 2014 and will collect views on options put forward by the Government, which include:

  • Banning the use of exclusivity clauses where a contract offers no guarantee of work
  • Introducing codes of practice on the fair use of exclusivity clauses and zero hours contracts
  • Improving information and guidance for workers, particularly around rights to leave and benefits.

Neil Carberry, director of employment and skills at the Confederation of British Industry, said zero hours contracts have “helped to save jobs through tough economic times and enabled businesses to respond rapidly to new opportunities over recent months.”

John Wastnage, employment and skills adviser at the British Chambers of Commerce, welcomed the consultation but stressed that it shouldn’t jeopardise the employment opportunities that zero hours contracts create. He said:

“The UK’s flexible labour market has prevented unemployment from increasing to the levels economists expected during and following the recession. Excessive restrictions on zero hours contracts could lead to increased unemployment among exactly those groups who already face higher levels of unemployment, and for that reason we are pleased that the government is taking an evidence-based approach. Zero hours contracts are vital for a successful jobs market, but they must be fair and work for all parties.”