Zero hours workers – Will the government’s reforms have zero impact?

17 December, 2018

Under new proposals that have been announced this week, the government plans to implement a number of the recommendations made by Matthew Taylor in his report into modern working practices. Whilst the government is calling the changes the biggest reform of employment law in 20 years, most commentators believe they do not go far enough.

These reforms are aimed at better protecting workers on zero hours contracts, agency employees or so called “gig economy” workers. So far, in spite of what many of the headlines suggest, the government hasn’t actually made any commitment to legislate or provided any dates when reforms will come into effect. All that they have put forward is a list of proposals, of which the key ones are:

  • Extending the right to a written statement of terms and conditions to workers as well as employees and requiring the employer to give it on the first day of work rather than within two months
  • Legislation to streamline the employment status tests so that they are the same for employment rights and tax purposes and to avoid employers misclassifying employees and workers and self-employed
  • Closing a loophole that had allowed agency staff to be paid less than permanent employees
  • Changing the rules on continuity of employment, so that a break of up to four weeks (currently one week) between contracts will not interrupt continuity
  • Ensuring that companies will have to calculate holiday pay for those with variable hours of work based on the average of their remuneration in the previous 52 weeks rather than the previous 12 weeks so that seasonal workers get the paid time off they are entitled to
  • A right for those on zero hours contracts to request a fixed working pattern

Many had hoped that the government would go further in tackling the so called “abuse” of zero hours contracts. It is expected that the right for zero hours workers to request a fixed working pattern will be similar to the right to request flexible working i.e. a series of procedural requirements that employers must follow but the retention of considerable discretion to refuse such requests and only limited financial penalties if they fail to follow the correct process.

Frances O’Grady, general secretary of the Trade Unions Congress said that: “Zero-hours contract workers will have no more leverage that Oliver Twist” and the TUC has called for the government to ban zero hours contracts once and for all.

The government agrees with the Taylor review that completely banning zero hours contracts “would negatively impact more people than it helped” and see the benefits of the genuine two-way flexibility that these types of contract offer employers and workers. However, Theresa May knows that reforms to these types of contract are necessary if she is going to make good on her promise to protect ordinary working class people who are “just about managing”.

It is difficult to see how these changes will do anything to shift the balance of power in the ever growing gig economy. Many workers will today be left thinking, “Please Mrs May, we want some more!”