Employment Law | Consultation Into Zero-Hours Contracts

At the launch of a 12-week consultation into zero-hours contracts this week, the Business Secretary Vince Cable said he has ruled out a complete ban on them, saying that they offer employers “welcome flexibility”.

According to Dr Cable, the contracts have their place in the labour market even though there has been evidence of abuse around their use. However, he suggested that firms could be barred from having “exclusivity contracts that stop people working for anyone else”.

The consultation is seeking ways to prevent any abuse and to maximise opportunities, both for employers seeking to create jobs and for individuals to get work that suits them.

It is seeking views on whether to legislate to ban the use of exclusivity clauses in contracts that offer no guarantee of work and whether it should offer guidance on the fair use of exclusivity clauses.

The consultation is also asking whether the Government should be encouraging the production of an employer-led code of practice on the fair use of exclusivity clauses, with an additional option to seek government sponsorship of that code, or whether it should rely on existing common law redress, which enables employees to challenge exclusivity clauses.

After considering the responses, the Department for Business, innovation & Skills will publish a formal response to the issues identified through the consultation, including information on what further action Government intends to take.

Business leaders have welcomed the decision not to ban zero-hours contracts entirely, saying that they have helped to save jobs through tough economic times and enabled organisations to respond rapidly to new opportunities over recent months but the unions have said that the Government is “desperately short on solutions” to restrict their use.

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Mackrell Turner Garrett Solicitors in London