Latest in Employment Law>Articles>Zero-Hours Contracts - The Current Law and the New Proposals
Zero-Hours Contracts - The Current Law and the New Proposals
Published on: 17/02/2023
Issues Covered: Contracts of Employment
Article Authors The main content of this article was provided by the following authors.
Seamus McGranaghan
Seamus McGranaghan

Christine:  So now we're just going to move on to the next topic. It's around zero-hours contracts. So draft legislation, as I said at the start, was introduced in the Assembly just before it fell. And it is aiming to enhance protection for zero-hours workers.

This isn't unique to Northern Ireland. Over in England and Wales, they have been legislating on that as well. They removed exclusivity clauses from being permitted. Down in the Republic of Ireland, they have a banded hours system.

Now, interestingly, the Northern Ireland Assembly version of the legislation is very close to the Republic of Ireland's. So it's useful. We have our neighbours to look at, to see what problems they've had with it, what they've done well, what they haven't. So that's quite useful.

But, Seamus, zero-hours contract isn't a legal term. It's kind of a concept, isn't it? Would I be right in saying that?

Seamus:  Yes. I mean, the starting point for it is really . . . In general, we have three types of employees. Or sorry, three types of categories of staff, not three types of employees. But we have three types of categories of staff.

We'll have an employee. Most people will fall into that bracket. I think the vast majority of people will fall into the aspect of employee.

Then we have worker. Employee and worker are very similar, but also very distinct rights.

And then the third is that we have an independent contractor.

Our standard employee that we think about will be somebody that has a contract of employment, and the contract of employment will tell them their terms and conditions. And part of those terms and conditions will be what their working hours are per week. And they'll know that if their contract says that they work 35 hours a week, that's the minimum that they can expect to work in their workplace. There might be some avenue for overtime outside of that, but the contract is very clear on it.

A zero-hours employee may also have a contract in place, but the contract will not provide any exclusive terms when it comes to the aspect of working hours. So there will be no obligation on the employer to provide a set number of working hours. There's no obligation to provide any work, and equally, there's no obligation on the employee to accept work if it is offered. Now, that's the general way that we would look at zero-hour workers.

Zero-hour workers fall into the workers category. Also, sometimes they may fall into the employee category also, but it's not an easy distinction to make. Labour Relations Agency have a document that you can look at to make a decision whether you are an employee or whether you're a worker. It's a grey area, and there's lots of case law around it, lots of case law that is in relation to it.

But the types of those zero-hour workers that we'll see will be . . . they're sometimes called bank staff, casual workers, care workers, delivery drivers. People that work within the gig economy will generally always be zero-hour workers. And we know that there have been interesting cases right up to the Supreme Court in and around the gig economy and those various types of delivery companies and fast food companies that will generally provide work to those gig economy workers.

But the zero-hour contract, it is a legal contract. It is a form of contract and it's permitted under the law. The problem with it is that it can be open to abuse. And often, a lot of the zero-hour workers are considered to be treated unfairly, unfavourably, detrimentally in comparison to an employee with an employment contract.

And interestingly, there was an old NICVA sort of response at the time for the Minister for Employment and Learning about the future position on zero-hour contracts. This is going back to 2014, which is almost 10 years at this point. That is very long time ago now when we think about things. But you can see how long that this has been in the contemplation of our government and issues that are arising from it.

But just some of the statistics around that . . . They're probably too old now to give really any too much value, but interestingly, it did record that women were more likely than men to have a zero-hour contract, and young people.

The types of industries that normally you're looking at, hospitality, retail, caring profession, are all generally on zero-hour worker contracts as well. And there's a vulnerability around those because, essentially, the organisation could provide them with 30 hours one week and zero the next. And what has happened is that those staff are vulnerable because they don't have a set number of hours, and then they end up being prepared to accept this vulnerable position from the people that are giving them work and they end up being treated very badly.

So government has for a long time been looking to step in to try to amend that. But the feeling that I'm getting . . . And I know maybe we want to move on in relation to what the proposed bill at the time was looking at. But I think government's concerns have been around the vulnerability.

I don't think that there's going to be a position where they're going to simply say zero-hour contracts are illegal. They'll look at amending the legislation, as they've done in GB and as they've done in the Republic of Ireland as well.

They're not all bad. They provide advantages for people, and there are some people that enjoy the flexibility that a zero-hour contract can provide. The member of staff can equally say, "I don't want to work next week. I'm actually going to be working on another project". Realistically, does that mean that the business is going to say, "Well, I'm not giving them work the following week because they didn't help me out this week"? There are so many problems that are complicit with them.

But it can help in relation to where a business is looking to expand, but expand cautiously, and the use of zero-hour workers. And it can help in relation to their retention. You can have a bank of staff there that know how your organisation works that you can call upon, and they will come in and work if they're available and if they want to, and they have knowledge of the business. They have knowledge of the culture of the business and everything like that as well.

But there are disadvantages there. And maybe just to bring that forward there, this was an extract from the Assembly Committee for the Economy at Stormont. And at the time, one of the MLAs was a Dr Caoimhe Archibald, and she had said that it was estimated that approximately 11,000 workers in Northern Ireland were on zero-hour contracts.

And she said, "We recognise that flexibility can be desirable for both employees and employers and that it enables growth and demand and things like that". But she also went on to say, "However, workers on zero-hour contracts can often be required to be readily available but with no guarantee for work. The unpredictability, the unreliable working patterns can lead the anxiety in workers, as well as an uncertainty about income, and can make it harder for some to make long-term financial plans".

So this was the committee that were examining the position around zero-hour contracts and what their thoughts were in relation to it.

Christine:  And so, Seamus, what are the proposals then? What was discussed in the Assembly about amending this?

Seamus:  Well, the bill itself, what the bill was entitled was the Employment (Zero Hours Workers and Banded Weekly Working Hours) Bill. And essentially, it set out fundamentally, I suppose, proposals about the way that zero-hour contracts are going to be regulated in Northern Ireland.

And what they said was that the overriding objective was to provide zero-hour workers with enhanced protections by providing less precarious working environments while still allowing for responsive and agile working.

So there are a couple of things that are key to it. One is you'd mentioned at the start there, Christine, about a ban on exclusivity clauses. And this was a real issue that was coming out in GB where employers were businesses and organisations were saying, "I'm going to give you a contract as a zero-hour worker, but you can't work for anybody else. You're restricted. You can't work for a competing business".

And if somebody has a certain skill . . . If you're working in hospitality as a waiter or a waitress and that is your skill and you're good at your job, if Business A can't provide you with hours that week, you're going to want to work and go for Business B because they have available work.

And these restrictions, then, that were placed on zero-hour workers are unfair essentially, because whilst not giving the worker any employment, it is also restricting them from engaging in other work as well.

So the plan would be that that those restrictive aspects would be valid and void. And I think in GB, the reports have been that employers will still readily try to put these restrictions into the contracts. The law is clear, though, that if they do, it is unfair.

And there have been additional protections provided. I was looking just at Acas last night, and there are restrictions there in GB that if you are subsequently dismissed or you're treated detrimentally because of your failure to adhere to a restriction on the exclusivity aspect, that is illegal, it's unfair, it's unfavourable treatment, and there are rights for the zero-hour worker to bring claims in relation to that.

There's also, then, this aspect of . . . There was potential of saying that you were going to have a minimum set of hours, so that if over a period of time you were doing a certain amount of hours, you would fall within these banded hours.

Seamus:  So there was this aspect of the possibility of looking at banded hours to say that if over a period of time you were doing a certain amount of hours, you would fall within this banded period, and that then there would be a limitation in the contract to say that was the minimum number of hours that you could be provided for. And if there wasn't any work, you would still get paid for those hours.

They did toy with the idea also of saying that if you were brought into work . . . And often this can happen. This is another really detrimental side of it. If you're brought into work and it turns out that it's not busy and they say after one hour, "We don't need you any longer, off you go home", this minimum aspect of saying that if you're brought into work, the minimum payment will be at least three hours' work. And even if you don't work the three hours, you're still entitled to some form of payment in relation to it.

But the banded hours is very similar to what they've done in the Republic of Ireland. In England, they've looked more at this minimum set of hours where the band works and . . . The band runs from A up to H. A is three hours and you get up to, but not including, six hours. Right up to G is 31 hours to 36 hours, and H is 36 hours and over. So if you're put into a band, then you're almost guaranteed that that will be your limited amount of pay that you'll receive.

But I think from what I can read, NI Business, and a lot of the consultation that came out in relation to this, there is support there for increasing the rights and benefits for anybody on a zero-hours contract.

And I suspect that if we get things back up and running here in Northern Ireland, or alternatively if we end up having to get a ruling from London, that this will end up with us at some point.

That's why we thought it was important to look at today, because we do have it already in GB and it's been brought in, in the Republic of Ireland. So it's very likely that we're going to end up with these added protections as well.

I think my view in relation to it is I'm perfectly aware of circumstances where it very much suits the employee and the employer, and that works well, but I'm also aware of other cases where it is entirely unfair. I think it's right that there's some form of amendment made to the existing laws.

Christine:  Brilliant. Thank you very much for that, Seamus.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 17/02/2023