The Gig is up for Zero Hours Contracts – or is it?

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The Gig is up for Zero Hours Contracts – or is it?

The emergence of Zero Hours Contracts was heralded a positive innovation with workers given the flexibility to choose their working hours to fit around studies, caring responsibilities or hectic lifestyle.

What happened instead was unscrupulous employers using this new approach to working to evade legal obligations such as sick pay and other benefits.

Not surprisingly, it was those already on low pay and the most vulnerable who were pushed into precarious employment relationships increasing their level of insecurity and anxiety. It is reported that millions of people are now in situations where there is no guarantee of work and are usually classed as self-employed even though the employer continues to exercise the same control over them they would a normal employee.

What’s worse is there is growing case law suggesting that employers have been able to bully and intimidate workers into unfair and exploitative arrangements such as “exclusivity clauses” preventing those on such contracts from working for another company and penalising a worker who has turned down hours that were offered to them by not giving them further work. 

Companies like Uber and Deliveroo have become synonymous with the “gig economy” after stories emerging in the press about their business operations and the legal challenges of employees. People have now come to the realisation that what was supposed to be a mutually beneficial arrangement is merely a sham, and in reality is one-sided and only beneficial to the employer.

This casualisation of the labour market has done a lot to undermine the rights that have been hard won over many years such as holiday pay, sick pay, the minimum wage but also has other ramifications.

People on Zero Hours Contracts do not fit neatly into our current three-tier employment status system (Employer, Worker or Self-Employed) which determines what statutory rights apply and how much tax is paid, and the courts are trying to bring some clarity through the cases brought by workers stuck in these bogus self-employed arrangements.

The government has responded to these abuses by commissioning the Taylor Review of Modern Working Practices which came up with 53 recommendations and in December 2018 the government responded with its report ‘The Good Work Plan’ its vision for the future of the labour market.

Rather than take a bolder future proof approach such as having one universal employment status for everyone providing rights for all from day one, the government has decided to stick with its three-tier system that is currently creating so much confusion.

It also fails to address the power imbalance in the employment relationship since far too much power still rests with the employer. One way to address this would be to increase the role of trade unions which in effect increased the voice of employees.

Reassuringly, the current Labour party has adopted recommendations from the Institute of Employment Rights ‘Manifesto for Labour Law’ and included them in their most recent manifesto ‘For the Many Not the Few’ as a blueprint for future reform including banning Zero Hours Contracts and introducing a single category for employment status and strengthening trade union rights. 

In the meantime, we shall still continue to see employers exercise their power inappropriately and in the worst cases, abusive employers exploit those who are most vulnerable in the workplace.    

Ranjit Singh
National Official

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