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Labour’s Proposal to Ban Zero Hours Contracts – Zero or Hero?

Labour has proposed banning zero-hour contracts for employees working regular hours for longer than 12 weeks. This revises its previously proposed policy to entitle those working regular hours for 12 consecutive months to automatically move to a regular contract. 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.”

There have been a number of criticisms of the proposal, suggesting that some employers will now simply end contracts before the 12-week mark and a number of questions remain unanswered; for example, 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? Employees don’t gain unfair dismissal rights until they have worked continuously for an employer for two years, so unless such a right is introduced employers won’t actually have more powers than they have now.

Flexibility in today’s workplace is vital and if the proposal is adopted, employers may be more reluctant to hire. Ed Miliband’s proposal would potentially undermine job creation, jeopardise zero-hours workers’ current jobs and increase their insecurity.

The issue is not zero hours contracts themselves but some of the requirements imposed by less scrupulous employers, such as exclusivity clauses seeking to prevent a zero-hours contract employee working for another company. It is important that employees are not abused in this way, but arguably it may be better to go the route suggested by the Coalition Government which has suggested banning exclusivity clauses. This would retain the flexibility principle but doesn’t throw out the baby with the bathwater.

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