Zero Hours Contracts Aren’t All Bad News

Joy Gateley Care Sector Expert At Avensure, Employment And Health & Safety Specialists.

Zero hours contracts have been much-maligned as the ‘unacceptable underbelly’ of employment. But they can be an invaluable advantage for care homes as a route to ensure staff and resident ratios are maintained.

The contracts are often used to cover sickness absence at short notice, allowing care homes to continue to provide the appropriate level of care, safeguarding standards in line with Care Quality Commission regulations and protecting the dignity of vulnerable people.

The contracts ensure that workers with the appropriate Disclosure and Barring Service checks can be called upon as additional support when needed. Being able to call on workers at short notice supports the full-time team in turn, ensuring their wellbeing is protected, so they are not put under additional pressure.

The form of contract, albeit a catalyst for current debate, isn’t all bad news. According to new research from the Chartered Institute of Personnel and Development (CIPD), they can also provide the flexibility many workers desire, as recognised by Business Secretary Vince Cable as he confirmed there are no plans to ban them while announcing a 12-week consultation on the controversial form of contract.

In July 2013, the Care Minister Norman Lamb confirmed that 307,000 people are employed on zero hours contracts in the social care sector. Meanwhile, the CIPD’s research has confirmed that approximately one million people (3.1% of the UK workforce) are now employed on zero hours contracts.

While the ethicality of such contracts continues to be the subject of debate, the CIPD’s research has painted a ‘reality check’. It highlights workers who are just as satisfied with their jobs as the average UK employee (60% v 59%) and happier with their work-life balance (65% v 58%). Almost half (47%) said they are satisfied having no minimum set contracted hours, with 44% of those saying that’s because flexible working suits their circumstances.

CIPD Chief Executive Peter Cheese insists zero hours contracts have been underestimated and unfairly demonised. The research findings suggest that, if used in the right way, they can provide flexibility for workers and employers alike.

The research findings suggest that if these types of contracts are being used in the right way, then the flexibility they afford can work equally for both employers and workers.

For the employer, there are things to consider:

  • Abuse of the balance of power to gain advantage from the contractual relationship must be avoided
  • Workers must be made fully aware of their rights so the contracts are entered into with mutual agreement
  • Limit exclusivity clauses, which prevent workers working for other employers when you have no work available
  • Irregular and unpredictable hours can make it difficult to calculate statutory holiday pay
  • The impact of pensions auto-enrolment. It may be difficult to determine when a zero hours worker reaches the qualifying earnings threshold to trigger auto-enrolment. If an auto-enrolled worker’s earnings drop below the qualifying threshold, employers may face unlawful deductions claims

A key case for care providers to note addressed the point at which the zero hours contract relationship became employment, unlocking unfair dismissal rights, statutory redundancy payments and statutory employment rights such as maternity and other family leave.

As with all cases considering employment status, courts and tribunals will not only look at the written contract but will look at how the contract has been performed in practice. In the 2012 tribunal, Pulse Healthcare v Carewatch Care Services Ltd & 6 Others, the reality of the regular work provided by the claimants meant there was sufficient mutuality of obligation to provide work and for the employee to undertake the work.

The Government’s consultation on zero hours contracts will explore and tackle any abuses, particularly around exclusivity, to ensure fairness and transparency.

The consultation should ensure there is a balance with the issues raised, one that truly reflects the contractual relationship, rather than reacting along with the political sweep, which has tended to focus on the negative aspect of zero hours contracts.

If the consultation finds the right balance then we are likely to see positive improvements in the regulation of zero hours contracts, making them a more popular way of agreeing working terms in the care sector.















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