Employment lawyers react to Labour's zero-hour proposals
Rebecca Gowler, April 02, 2015
The employment law community has reacted to Labour's recent proposal to ban zero-hour contracts for employees working regular hours for longer than 12 weeks.
Introducing the policy, Labour leader Ed Miliband said: “It [the practice of zero-hours contracts] is leaving people without a reliable income, not knowing from one day to the next how much work will be coming in, unable to plan from one week to the next.”
But some have criticised the proposal, warning that some employers will now simply end contracts before the 12-week mark.
Mayer Brown employment lawyer Christopher Fisher said the key question was whether Labour would also introduce anti-avoidance measures.
“What is to stop the employer dismissing staff before the 12 weeks is reached?” said Fisher. “Currently, unfair dismissal rights only accrue for employees who have two years’ service and none of the parties have suggested that they would review the two year qualifying period itself, which was increased from one year under the coalition.”
“Will there be a proposal that a dismissal made in order to avoid the 12 week threshold will constitute an automatic unfair dismissal, without the need for two years’ service?”
Fisher added: “Given how unpopular Labour’s existing proposal already is with the business sector, such a move would perhaps be a step too far.”
Thomas Eggar associate Matthew Irvine agreed. He said the proposal may make employers more reluctant to hire. "In reality, employers may well choose to dismiss workers before they reach 12 weeks or be reluctant to offer work in the first place.”
“While Cameron may have admitted he couldn’t live on one, a zero-hours contract is likely to be better than no contract at all. Miliband’s proposal would potentially undermine job creation, jeopardise zero-hours workers’ current jobs and increase their insecurity.”
However, Irvine believes banning exclusivity clauses so that employers cannot prevent a zero-hours contract employee working for another company, as recently proposed in Coalition Government draft legislation, seems “reasonable and fair”.
Doyle Clayton partner Jessica Corsi countered criticisms that the proposal would simply encourage employers to dismiss employees before 12 weeks of regular work, saying that the proposal won’t give employers any more power than they have currently.
She said: “Employees don’t gain unfair dismissal rights until they have worked continuously for an employer for two years, so employers won’t actually have more powers than they have now.”
“What it will do is help to ensure that employers focus more carefully on who they need when. Three months seems like a reasonable amount of time to determine whether or not extra staff are needed on a longer term basis.”
According to Colin Leckey, employment, reward and immigration partner at Lewis Silkin, the proposal could “inhibit” workplace flexibility.
He said: “There continues to be a general shift away from traditional ‘9 to 5’ working arrangements. While this varies from industry to industry, increasing numbers of employers view the notion of core hours as archaic, taking the view that as long as the job gets done they don't mind when or from where the employee does it. Any new legislation in this area could inhibit such flexibility."