jeremias prassl associate professor magdalen college university of oxford zero-hours contracts the...

Jeremias PrasslAssociate ProfessorMagdalen CollegeUniversity of Oxford

Zero-Hours Contracts

The Limits of Employment Law in

Regulating Precarious Work (?)

RDW 2015

ILO, GENEVA27 April 2015

OUTLINE

The Zero Hours ContractDr Jeremias Prassl

‘Before considering the advantages and disadvantages of zero-hours contracts, let me make a basic point […]: it is intrinsically tricky.

Dr Vince Cable MP

I. Defining the Zero-Hours Contract

II. ZHCs as Contracts of Employment A Spectrum of Work Relationships

III. The ‘real’ problems with Zero-Hours Work Risk Shift Normalising precarious work

IV. Regulating Zero-Hours Contracts Recognising the limits of employment law?



ZHC = ‘an employment contract in which an employer does not guarantee the individual any work and the individual is not obliged to accept any work offered’

[BIS, Consultation 2013]Sample Clause

Deakin & Adams (2014): ZHC = a contract under which an employer agrees to pay for work done but makes no commitment to provide a set number of hours of work per day, week or month.

ONS: shift to ‘no guaranteed hours contracts (NGHCs)’



Small Business, Enterprise and Employment Act 2015, section 153:

(1) … “zero hours contract” means a contract of employment or other worker’s contract under which—

(a) the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker, and

(b) there is no certainty that any such work or services will be made available to the worker.

(2) For this purpose, an employer makes work or services available to a worker if the employer requests or requires the worker to do the work or perform the services.

[to become s 27A of ERA 1996]

I. Still, some Problematic Assumptions…


1. The ZHC as a new Phenomenon?

2. The ZHC as a Clear Set of ‘Atypical’ Work Arrangements?

I. Problematic Assumptions…


1. The ZHC as a New Phenomenon?

Mailway (Southern) Ltd v Willsher [1978] ICR 511 (EAT)Postal packer ‘could and would only attend for work in accordance with the need expressed by the employers’

1995: the ‘Burger King’ saga

Fairness at Work (1998): should further action ‘be taken to address the potential abuse of zero hours contracts and, if so, how to take this forward without undermining labour market flexibility’?

I. Problematic Assumptions…


2. The ZHC as a Clear Set of ‘Atypical’ Work Arrangements?

The ‘heterogeneity of temporary work’: multiple, overlapping categories

A wide range of possible analyses Categories do not neatly map onto each other

II. Zero-Hours Contracts & Employment Law


A Spectrum of (Contractual) Work Relationships, capable of providing:

(-) Minimum Rights(-) Mutuality of Obligation(-) Continuity

The Fundamental Problem: economic precarity Counter-Intuitive: the more precarious, the less protected An incentive for capricious employer behaviour?



(-) MINIMUM RIGHTS

Protection attached to ‘Spot Contracts’

NMWA 1998; Working Time Regulations 1998

(though still some problems: eg last-minute shift cancellation)

Discrimination law



The primary stumbling block: Mutuality of Obligation

Nethermere [1984]: the ‘one sine qua non which can firmly be identified as an essential of the existence of a contract of service … there must be mutual obligations on the employer to provide work for the employee and on the employee to perform work for the employer.

(Dillon LJ)

See e.g. the ‘ZHC’ workers in O’Kelly (waiters) & Carmichael (guides)!

And NB extension to workers’ contracts: Byrne Bros [2002]; Redrow Homes [2004]



(-) NO EMPLOYMENT PROTECTION?

Mutuality of Obligation not always fatal to Employment status:

Cotswold Developments [EAT 2006]: fact-sensitivity

St Ives [EAT 2008]: ‘a course of dealing, even in circumstances where the casual is entitled to refuse any particular shift, may in principle be capable of giving rise to mutual legal obligations in the periods when no work is provided.’



(-) ZHC clauses

We can disregard terms inserted simply to destroy umbrella relationship:

Autoclenz [UKSC 2011]: focus on ‘actual legal obligations’ [32]

Pulse Healthcare [EAT 2012]: intensive medical care worker, contractual ‘Zero-Hours Agreement’

Does not reflect true agreement, even though employee can object to rostered hours



What about those rights available only to employees following a qualifying period

Most importantly: Unfair Dismissal protection & Redundancy Pay

Not a problem as such if e.g. working 1h/week

BUT still a real problem with precarious relationship, low income

III. ZHC as a Regulatory Challenge


The Underlying Problems:

Uncertainty: heavy dependence on specific fact patterns The more precarious the work arrangement, the less likely protected!

1. Risk Shift: Attack on fundamental trade-off in the Contract of Employment Workers to bear risk of business cycle fluctuation [cf. Jacob Hacker in the US]



2. Normalisation of Precarious Work:

1. The Problematic Statistics

2. Focus on solving small [non-]issue: exclusivity

3. ZHC become an acceptable category of work relationship



1. The Empirical Evidence: Few Contracts, Happy Workers

ZHC Advantages: Flexibility [e.g. past ONS qualitative surveys]

Resolution Foundation: workers often do not understand ZHC

The Numerical Problems: how many people are there on ZHCs?

[Q4] 2012: 250,000 [Q4] 2013: 583,000

still a significant underestimate!

NB significant shifts in ONS methodology (business surveys, CNGH)

ZHC estimates in LFS & public awareness:


Num

ber

of

ZH

Cs

in

LFS

Source: Authors’ calculations from the LFS and Google Trends



2. Small Business, Enterprise and Employment Act 2015

Section 153: exclusivity terms unenforceable in ZHCs

27A(3) Any provision of a zero hours contract which—

(a) prohibits the worker from doing work or performing services under another contract or under any other arrangement, or

(b) prohibits the worker from doing so without the employer’s consent,

is unenforceable against the worker.



2. Focus on a Very Narrow Set of Problems

Low prevalence; probably unenforceable at Common Law

Potentially Unintended Consequences: see eg last minute insertion of section 27A(4)

Subsection (3) is to be disregarded for the purposes of determining any question whether a contract is a contract of employment or other worker’s contract



3. Legitimating Precarious Work:

Consultation, Legislative Response

ZHC as a standard arrangement, where employees bear risks of insecurity of work & income

The Universal Credit example

Will 2015 Manifesto Promises herald any meaningful change?

ZHCs in the party Manifestos (May 2015)


Labour: Those who work regular hours for more than 12 weeks will have a right to a regular contract; zero-hours workers who have their shifts cancelled at short notice will receive compensation from their employer.

And NB the Pickavance Report (Spring 2015)

Conservatives: take further steps to eradicate abuses of workers, such as non-payment of the Minimum Wage, exclusivity in zero- hours contracts, …

ZHCs in the party Manifestos (May 2015)


LibDem: a formal right to request a fixed contract and consult on introducing a right to make regular patterns of work contractual after a period of time

UKIP: Businesses hiring 50 people or more must give workers on zero-hours contracts either a full or part-time secure contract after one year, if the workers involved request it; 12h advance notice (binding commitment to pay)

IV POTENTIAL SOLUTIONS?


Regulating Zero-Hours Work: beyond the realm of labour law?

Banning ZHC: not a solution (definition; flight into fake self-employment)

Common Law: developing Mutuality of Obligation– But NB inherent limits of that approach (Countouris & Freedland)

Statutory Regulation: the Importance of Social Security legislation– Deakin & Adams [IER, 2014]– HL Debate, 26 January 2015

Jeremias PrasslAssociate ProfessorMagdalen CollegeUniversity of Oxford

ANY QUESTIONS?

[email protected]

jeremias prassl associate professor magdalen college university of oxford zero-hours contracts the...

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