Business secretary Vince Cable has set forth a list of proposals to reduce exploitation of workers employed through zero hour contracts. His proposed reforms, which would affect many part-time workers and freelancing professionals, focus primarily on outlawing exclusivity on zero hour contracts. Additionally, he is campaigning for greater transparency around the issue and increased guidance for workers.
The proposals are part of a bid to improve fairness across the flexible employment sector, and reduce opportunities for exploitation of employees.
MP Vince Cable said: “A growing number of employers and individuals today are using zero hour contracts. While for many people, they offer a welcome flexibility to accommodate childcare or top up monthly earnings, for others it is clear that there has been evidence of abuse around this type of employment which can offer limited employment rights and job security.” He added that while he believes zero hour contracts do have a place in today’s labour market, he wants to make sure workers are “getting a fair deal”.
Zero hour contracts are used throughout countless industries and across various sectors, from small, limited companies and contractors to large corporations. Under these contracts, employees are often called in at a moment’s notice, as and when they are needed. Sick pay is typically not included in the employment package, and many workers do not have the option to refuse a shift.
Still, they are seen by many limited companies as an essential way to manage their workforce.
PCG’s chief executive, Chris Bryce, said: “Clearly businesses need access to flexible resource and zero hour contracts deliver that.”
Exclusivity is the big issue, which prohibits workers from seeking secondary employment to supplement their income. MP Vince Cable said: “We don’t think that people should be tied exclusively to one employer if it unfairly stops them from boosting their income when they are not getting enough work to earn a living.” With regards to this, he feels contracted workers need more guidance and advice to help stay afloat and support themselves, as well as their families.
His proposals are being considered by the government as part of a 12-week public consultation exercise which will run up till mid-March 2014. Upon its conclusion, ministers will decide whether exclusivity on zero hour contracts will be outlawed.
Mr Bryce of PCG said the proposals are “an encouraging sign that the Government recognises the importance of flexible working to the economy”. He added: “Mr Cable’s words provide reassurance that any measures designed to stamp out exploitation of vulnerable workers will not negatively affect genuine independent professionals in business on their own account.”
Though exclusivity reform is welcomed by many, the British Chambers of Commerce has warned against excessive regulation, saying it could cost the UK thousands of jobs – jobs which are ideal for students, busy professionals and self-employed contractors.
Tim Thomas, head of employment at the manufacturer’s organisation EEF, said: “We are glad to see the government has resisted a heavy-handed approach to zero hour contracts. Focusing on a limited number of areas allows best practice examples of their use to continue.”
According to figures from the Office for National Statistics, approximately 250,000 workers in the UK – or one per cent of workers - are currently employed through zero hour contracts.
I am a chartered tax advisor with a specialism in the freelance contractor sector advising contractors on how to structure their affairs and recruitment businesses and end hirers on the effective…
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