Unscrupulous zero hours firms targeted

Business Secretary Vince Cable has called on business, unions and individuals to help identify and close potential loopholes in plans to ban the use of exclusivity clauses in zero hours contracts (ZHC).

The government wants to find out whether a minority of unscrupulous employers may attempt to circumvent the ban by offering contracts which could, for example, guarantee just 1 hour of work. This consultation seeks views on the best method to prevent this from happening, and asks people whether they think this route may be exploited and whether the government should take pre-emptive steps.

It also proposes options, such as civil penalties, that workers could use to seek justice if they are treated unfairly by their employer because they found work elsewhere while on a zero hours contract.

The consultation, launched today (25 August 2014) by the Business Secretary, follows the announcement in June 2014 that the government would ban the use of exclusivity clauses. Exclusivity clauses prevent workers on zero hours contracts from taking work elsewhere even when their employer provides no work.

Business Secretary, Vince Cable said:

We are tightening the screws on rogue employers who try to abuse workers on zero hours contracts. We are looking closely at any potential loopholes that could arise from a ban, to ensure that these are closed off and no one can get round the new law. We are also ensuring there is access to justice for workers treated unfairly.

The evidence shows that the vast majority of zero hours contracts have been used responsibly by many businesses for many years, but unfortunately we know that some abuse does take place. This is why we are bringing in new laws to ban the use of exclusivity clauses in zero hours contracts, which currently stop employees getting other jobs if they need to top up their income.

We want to give individuals the chance to find work that suits their individual circumstances whilst also giving employers the confidence to hire and create new jobs.

The government also announced that business representatives and unions would work together to develop sector-specific codes of practice to help guide the fair use of zero hours contracts, and that it would help improve the information available to individuals and employers on using these contracts.

The views submitted to the consultation will help inform the implementation the zero hours contracts section of the Small Business, Enterprise and Employment Bill.