INTRODUCTION
Zero-hours contracts have become a contentious issue in the employment landscape in Northern Ireland, raising concerns about job security, financial security, employee rights and the overall well-being of workers. Consequently, the Northern Ireland Assembly consulted in 2022 on proposed legislation, the Employment (Zero Hours Workers and Banded Weekly Working Hours) Bill, which would provide enhanced statutory protections for zero-hours workers including banning exclusivity clauses.
The main outcome of the consultation was that there will be no outright ban, with the Department for Employment and Learning citing that this “would have a disproportionate impact upon flexibility within the economy, and potentially remove some employment opportunities”. Consequently, it is still lawful for employers to engage workers under zero-hours working arrangements.
WHAT ARE ZERO-HOUR CONTRACTS?
There is currently no accepted legal definition of what a zero-hours contract is, in essence, these contracts typically entail informal employment whereby the employer is not obliged to provide work and only pays for work actually completed. Workers under zero-hours contracts have the flexibility to accept or reject work when it is presented. Accordingly, there is no “mutuality of obligation”.
ADVANTAGES AND DISADVANTAGES OF ZERO-HOURS CONTRACTS
These contracts have been both praised for their flexibility and criticised for their potential exploitation. A key point in support of zero-hours contracts is the flexibility they offer to both employers and workers alike. Employers can quickly adjust their workforce based on demand, while workers can balance their personal lives with work responsibilities. However, critics argue that the absence of guaranteed hours leaves workers in a vulnerable position, unsure of their income from week to week.
Indeed, Trade Unions in Northern Ireland have been vocal in their opposition to zero-hours contracts, advocating for enhanced workers’ rights and more secure employment arrangements. They argue that such contracts disproportionately affect vulnerable workers, exacerbating income inequality and hindering the collective bargaining power of employees. Conversely, some business leaders argue that zero-hours contracts are essential for maintaining competitiveness, especially in industries where the demand can be unpredictable.
Striking a balance between flexibility and job security requires nuanced legislation and proactive measures. Exclusivity clauses in particular pose a problem as they operate to restrict workers from engaging in any other work, even if they are not offered work under the zero-hours contract. While there may be certain circumstances where such a clause is justified, such as protecting confidential information, there is a concern that employers are using these clauses without any valid justification. Several suggestions have been proposed to tackle the concerns, such as providing information and guidance, implementing an employer-led Code of Practice to promote fair usage of zero-hours contracts, banning exclusivity clauses and introducing model clauses to clearly define workers’ rights under these contracts. However, the Northern Ireland Assembly are yet to implement these proposals.
USING ZERO-HOURS CONTRACTS
Employers are likely to encounter legal and practical obstacles when managing zero-hours contracts due to the varying rights and protections granted to zero-hours workers based on their employment status i.e. whether they are considered workers or employees. Tribunals will not only consider the written contract but also how it has been performed in practice as if there is an “expectation” of work being provided and accepted, an employment relationship may nevertheless exist. Employers should therefore continually assess the relationship they have with their zero-hours staff.
A zero-hours ‘worker’ will benefit from various statutory rights such as protection from discrimination, holiday pay, national minimum wage and, in certain cases, statutory sick pay. However, a zero-hours ‘employee’ will benefit from a much higher level of protection and will enjoy additional rights including protection from unfair dismissal, an entitlement to statutory redundancy payments, and an entitlement to maternity/family leave. It is therefore essential for employers seeking to use zero-hours contracts to assess the status of their zero-hours workers from the outset of the working relationship.
CONCLUSION On 26 February 2024, the Economy Minister for Northern Ireland confirmed his intentions to introduce legislation to bring an end to zero-hours contracts. This would be a departure from the position in Great Britain where such contracts are lawful but there is a ban in the use of exclusivity clauses. However, in Republic of Ireland, zero-hours contracts have been banned since 2018. Considering the benefits, finding a middle ground in the legislation and adopting the approach of Great Britain may be more suitable than abolishing zero-hours contracts. However, although the future of these contracts is uncertain, the use of zero-hours contracts is perfectly lawful.
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Written By Kerri McGrory
