HomeInsightsZero-hour contracts under fire

You would be hard pressed to have avoided the recent furore surrounding zero-hour contracts.  The Labour party have been pushing for a ban on these flexible working arrangements for some time and the Guardian has exposed alleged abuse of zero-hours contracts by a number of high profile employers.  Following reports that up to 1 million workers in the UK work on such contracts (based on a study by the Chartered Institute of Personnel Development (CIPD)), the debate has now reached full swing. In perhaps the most intriguing development, Sports Direct are facing a legal challenge (http://www.theguardian.com/uk-news/2013/aug/07/sports-direct-zero-hour-contracts) after it emerged that 20,000 of its 23,000 workforce who operate under zero-hour contracts will not benefit from the bonuses of up to £100,000 that are due to be paid out to most of its permanent staff.  With employers such as McDonalds, Cineworld and Buckingham Palace also admitting to regular usage of such contracts, it’s possible that the Sports Direct case may pave the way for further legal challenges over the coming months. Vince Cable has been leading a government review on the issue since June.  Speaking last week, he indicated that the Coalition might look at changing the rules for zero-hour workers who were only allowed to work exclusively for a single employer but ruled out a complete ban on the practice. He said “What we want is a flexible labour market so people can get jobs, come out of unemployment and find work. Of course we do not want employment contracts abused… Let us see if there is a problem before we try to fix it.” In any event, from an employment law perspective, there’s a number of potential pitfalls with zero-hour and casual contracts.  Often the most complicated issue is whether or not the individual has employment status and/or whether they maintain continuity of employment during periods when they are not provided with work.   You can see therefore why careful drafting is essential.  If you would like any further information please let us know. If you have any questions on any of these, please Marcus Rowland (marcus.rowland@wiggin.co.uk / 0207 927 9677) or Seth Roe (seth.roe@wiggin.co.uk / 01242 631 262)

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