Department for Business, Innovation and Skills announces consultation on zero hour contracts

The Department for Business, Innovation and Skills has announced a package of measures to “inject more fairness into the workforce and in wages for British workers”.

Dr Vince Cable, the Business Secretary, announced the consultation after an initial review was conducted over the summer. The purpose of the consultation is to examine whether any abuse of the zero-hour contract is taking place after recent widespread media concerns over the use over these types of contracts. Zero-hour contracts are a type of contract of employment used in the United Kingdom which creates an “on call” arrangement between an employer and an employee. It does not oblige the employer to provide work for the employee and the employee does not have to accept the work offered. Such arrangements have been criticized as providing the employer with particular power (more so than in a normal employer-employee context) over the employment relationship, with the use of zer0-hour contracts being described by Unite the Union as “[the] latest attack on workers’ rights and dignity”. However, the use of such contracts has been defended by business groups, with the Central Business Institute stating that the use of the contracts “play a vital role as a way of keeping people in employment”.

He stated that “I have been examining closely the issue of zero-hour contracts over the last few months. We’ve been speaking to businesses, trade unions and other groups both about their downsides and their benefits. It is clear that they are much more widely used than we had previously thought. It is also clear that there are abuses in the system, especially around the issue of exclusivity which some employers are demanding from workers on these contracts.”