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Change needed to ensure the flexibility that can be offered by zero hour contracts benefit employers and employees equally

The CIPD is recommending the Government ban employers from using exclusivity clauses for zero hours contract workers unless they can demonstrate a compelling business reason for using them.

The recommendation is included in the CIPD’s response to the Government’s consultation on zero hours employment contracts which closed yesterday (March 13).

The CIPD also recommends the Government consider introducing a right for zero hours contract workers to request a minimum number of hours per week after they have been working for an organisation for at least 12 months.

In addition, the CIPD is calling for an amendment to the Employment Rights Act to require that workers and not just employees have the right to receive a written copy of their terms and conditions not later than two months in employment .This would help provide greater clarity on behalf of both parties on the issue of employment status and the associated employment rights.

The CIPD’s response was informed by responses from more than 170 members and its research report ‘Zero hours contracts: Myth and reality’ which showed that in many instances zero hours contracts provide useful flexibility for both employers and individuals engaged on these types of working arrangement. The research showed that zero hours workers are more likely to be satisfied with their work-life balance (65%) compared to all employees (58%), are less likely to feel under excessive pressure every day (8%) compared to all employees (13%) and have comparable job satisfaction (60% compared to 59% for all employees).

However it also found that a minority of zero hours workers (15%) say they are only sometimes allowed to work for another organisation when their primary employer has no work available and 9% say they are never able to work for another organisation in these circumstances.

Ben Willmott, Head of Public Policy at CIPD, comments: “Our research reveals that zero hours contracts can work well for both employers and individuals on these types of working arrangements, providing valuable workplace and labour market flexibility. However, our research also flagged that bad practice does exist. Our consultation response sets out what CIPD believes should be done to ensure that zero hours workers don’t feel they are being exploited. 

“We are recommending that exclusivity clauses should be outlawed unless there is a justifiable and compelling business case for them to be used, for instance where an employee working for a competitor may result in the loss of commercially sensitive or valuable information. The nature of zero hours employment means that some people on these arrangements might have more than one job and so it is unfair for employers to require that zero hours staff can’t work for other organisations when they cannot provide work, except in very specific circumstances. We’d also like to see workers who have been working for an employer for 12 months or more given the right to request a minimum number of working hours per week.”

The main calls are:

• The use of exclusivity clauses in zero hours contracts preventing workers from working for another employer should be banned, with a narrow exemption for employers that can demonstrate a compelling business reason, for example, confidentiality or the protection of trade secrets. 

• CIPD recommends that staff on zero hours contracts should, after a minimum period of 12 months service with an employer, have the legal right to request a minimum number of hours per week.  Employers would have to respond positively to the request unless they had a business reason for turning it down.

• The CIPD believes all workers should be legally entitled to a written copy of their terms and conditions not later than two months in employment (currently under the Employment Rights Act 1996 only employees are entitled to this). This would help provide greater clarity on behalf of both parties on the issue of employment status and the associated employment rights.

• The CIPD would support the creation of a code of practice setting out for employers and zero hours workers some key principles and guidance on the responsible management of these types of working arrangements.