Vince Cable’s zero hours contract ban now in force

The Liberal Democrats may no longer be in government but laws we made are still being implemented. Earlier this week, Vince Cable’s ban on exclusivity contracts in zero hours contracts came into force.

It was pretty ridiculous that a company could both have no obligation to provide work and to require that their employees didn’t work for anyone else.

The CIPD, the organisation for HR professionals, wrote about the change on their blog;

Legislation proposed by former business secretary comes into force today

Employers who do not guarantee staff any hours of work, but prevent them from working for another employer, could face legal ramifications from today under a provision in the Small Business, Enterprise and Employment Act.

The ban on the use of exclusivity clauses in zero-hours contracts, which was first proposed by the outgoing coalition government, comes into force after a lengthy public consultation.

Before today employers were not prohibited from seeking exclusivity from an individual as this was considered a contractual matter between the employer and individual.

However, after 83 per cent of respondents to the government’s consultation voted in favour of a ban on exclusivity clauses, it is now a legal offence to prevent staff on zero-hour contracts from seeking other employment.

Nick Boles, minister of state for the Department of Business, Innovation and Skills said: “Exclusivity clauses in zero hours contracts prevent people from boosting their income when they have no guarantee of work.

“Banning these clauses will give working people the freedom to take other work opportunities and more control over their work hours and income. It brings financial security one step closer for lots of families.”

It is quite galling to see the announcement coming from a Conservative when Vince had to fight them to get it through. We need to make sure that the public are aware that these sorts of changes came from us.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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25 Comments

  • Jenny Barnes 29th May '15 - 4:27pm

    ring ring
    Hello, Ms ZHC speaking
    Oh hi, it’s employer A. We’ve got 4 hours work for you tomorrow from 8 to 12.
    Oh, Sorry, employer A; I’ve actually agreed to work all day tomorrow for employer B.
    Ok, then, catch you later (Thinks. shan’t phone Ms ZHC again, she’s not very committed)

  • Eddie Sammon 29th May '15 - 5:57pm

    Brilliant news. It is important to get this out there. A lot of people still seem to think the last government sat on their hands when it came to zero hours contracts.

  • I was a firm coalition supporter but let us forget the last government, it is complete history. We are in a totally new ball game and should act and respond appropriately. Our involvement in any UK government ain’t going to arise for maybe decades. We have to move on and start with a new blank piece of paper, and that NOW unfortunately and probably involves a by election in the Orkney and Shetland seat.
    .

  • @Jenny – An interesting point!

    Firstly I think there will be some employers who will make it clear to people on zero hour contracts what their expectations are: namely the contract says one thing but they expect another… These employers need to be reported so that they can be investigated and if necessary prosecuted.

    Secondly, this also cuts the other way. An employer now has to do more to ensure their personnel on zero hour contracts actually have a reason to give them priority, rather than simply assuming these people are simply sitting around waiting for the phone to ring….

    I think this change helps to rebalance the risk and reward of zero hour contracts between employer and employee and hence welcome the change.

    What is particularly noteworthy, is that whilst the Small Business, Enterprise and Employment Act 2015 became law on 26 March, many of the measures required a commencement order and detailed regulations before they came into effect. The relevant commencement order was made by Nick Boles on the 20-May [see: http://www.legislation.gov.uk/uksi/2015/1329/made ].

  • Interesting and relevant piece in the Guardian:

    “The new measure against so-called exclusivity clauses was much touted by Cameron in the Conservative party election campaign.

    However, lawyers say that the ban is not backed by any enforcement measures, meaning zero-hours workers have no way of taking action against employers who break its terms.”

    (http://www.theguardian.com/uk-news/2015/may/26/conservatives-zero-hours-contracts-small-business-act-david-cameron-toothless )

    Whilst I understand and appreciate the concerns raised in the article, I think the new law is a step forward. My bigger concern is the current interpretation of employment law which has meant shop workers working for national chains have had their consultation and redundancy rights significantly reduced, because the law has been taken to apply to the place they work and not the company they work for.

  • Zero hours contracts shows that there are too many people chasing un and semi-skilled work which gives th employer a massive advantage . The greatest power an employee has is when two or more potential employers are offering jobs. At the moment there is a massive shortage of skilled people. The greatest bargaining power someone has is to obtain skills which pay well and this may mean not taking a levels and reading an arts subject at an ex-poly. Instead by the age of 21-22 years make sure one has a NVQ3-4 which enables one to enter highly skilled employment.

    Zero hours contracts occur because the employer operates in a highly volatile market which is most likely low skilled service sector which is not a career one ideally wants to be in . The lower the skill required to do a job , the more likely one is going to encounter a bad employer.

  • Nobody should be committed to sitting around all day waiting for an employer to maybe call, maybe not, when they could be doing other work. Why should an employee be committed to an employer when the employer has no commitment to the employee?

  • Little Jackie Paper 29th May '15 - 8:18pm

    I’m sort of in two minds on this. To some extent ZHC is basically the modern equivalent of the queue at the factory gates. If we want people to look to employment rather than the state that implies job security – simple as that. But then I suspect that some of this controversy is simply increased awareness now (no bad thing in itself). Things like ZHC bar work for students and the like are hardly anything new.

    Personally I would like to see a huge crackdown on the use of agency staffing in the public sector – that would, to my mind, be a better target for action than ZHC.

  • Little Jackie Paper 29th May '15 - 8:31pm

    Charlie –

    ‘Zero hours contracts occur because the employer operates in a highly volatile market which is most likely low skilled service sector which is not a career one ideally wants to be in .’

    That might have been true in the past, but I suspect that is less true now – particularly in things like computer science (as distinct from programming). It’s not a black and white thing.

    ‘At the moment there is a massive shortage of skilled people.’

    This gets trotted out all the time on the internet and by employers with vested interests in not putting their hands in their pockets. There are most certainly skill shortages in the sense of global skill niches, but these are nothing new (in fact it’s interesting to wonder why globally these have not been sorted given they aren’t new). Outside of global niches however there is a much more nuanced picture – https://www.timeshighereducation.co.uk/features/does-the-uk-really-need-more-engineers/2011723.article. Simply trotting out the usual internet-friendly cant with the inference about the kids all being thick really does a disservice to a complex and changing argument. Try here too
    http://live.iop-pp01.agh.sleek.net/2014/09/25/the-stem-shortage-paradox/

    ‘The lower the skill required to do a job , the more likely one is going to encounter a bad employer.’

    I don’t think this is necessarily true.

  • Julian Gibb 29th May '15 - 9:22pm

    The LibDems behaved like Tories. Quacked like Tories, Supported attacks on the poor like Tories…and you dig up a story like this?
    Roll on Holyrood as even with a proportional voting system you are going to be wiped out for being Tories.

    Talk about burying your head in the sand!

  • “Personally I would like to see a huge crackdown on the use of agency staffing in the public sector”
    I suppose agency staffing is pretty much the polar opposite to Zero Hours Contracts. I know two people who are state registered nurses. Neither actually need to work for reasons of otherwise financial security. They work on an agency basis, because it is very lucrative, and with a choice of hours which, ‘works for them’. And whilst I agree with the sentiment that public services need to crackdown on agency staff,.. can we really blame people for optimising profit from their skills.?
    We accept that a footballer derives a contract to sell his skills for £150,000 per week, but we flinch if a person who has a needed public skill, does a similar exercise in optimising!.
    Folk with low skills wait for a call that may not come, whilst folk with wanted skills can go play golf, whilst they stack the offers of work on their answer phone. This is perhaps one of those ‘intract~ables’, that we ponder as we read Karl Marx and Ayn Rand, trying to find an acceptable middle ground.
    For sure, the answer sits somewhere in education. And for that very reason alone, the Coalition’s tuition fees legislation, was a terrible error. The tuition fees policy, should have been more nuanced, in that it should have identified the skills we need for a flourishing society, and then designed to incentivise the young student, who decided to pursue those needed skills.

  • The kinds of folk on zero hours contracts are not going to be able to employ the services of an employment lawyer to check their contracts, last time I looked youd struggle to get employment law advice for less than 200 pounds an hour. To make this have any effect we’d have to offer some kind of “check a contract” service on the web to check against this law and then bring some test cases as noone on minimum hours could afford to bring a case.

  • @Julian Gibb
    It might be a better idea to attack Tories for being Tories if not liking Tories is your motive, although I take your point that the Lib Dems are far easier to destroy, so you can call them Tories and demolish them instead. The thing is, some people have noticed that doing exactly what the Tories want you to do (for example – refuse to vote Lib Dem because you think they are Tories) is not the best way to hurt the Tories, it is the best way to get Conservative Majority Rule, so now that is what we have got, and everyone will soon see if punishing the Lib Dems was really such a good idea.

  • Little Jackie Paper 29th May '15 - 10:38pm

    John Dunn – ‘can we really blame people for optimising profit from their skills.?’

    Oh, sure I agree – no blame attached to the staff. Agency staff is nothing new of course and there will always need to be some level of agency staff. But it’s the scale of it now that bothers me. If it’s nursing you are talking about see p19 here:
    http://www.rcn.org.uk/__data/assets/pdf_file/0005/608684/FF-report-Agency-spending_final_2.pdf

    ‘ The tuition fees policy, should have been more nuanced, in that it should have identified the skills we need for a flourishing society, and then designed to incentivise the young student, who decided to pursue those needed skills.’

    Maybe. But it’s not clear to me that the skills you talk about are NECESSARILY shortage skills. Arguably the fees policy does what you suggest anyway.

  • Philip Rolle 30th May '15 - 1:56am

    I very much agree that far too many agency staff are employed in the public sector is this needs to be tackled. Another thing that needs to be addressed is failure to enforce the IR35 rules. Either police them properly, or abolish them and replace them with something that leads to the correct tax and national insurance rules being regularly adopted.

  • Jenny Barnes 30th May '15 - 8:30am

    roland “An employer now has to do more to ensure their personnel on zero hour contracts actually have a reason to give them priority, rather than simply assuming these people are simply sitting around waiting for the phone to ring”

    That assumes there is any shortage of desperate people on ZHCs. The way the dockers dealt with the queue at the gates employment system was to unionise. The relationship between employer and employee in these cases is very far from equal.

  • Simon Gilbert 30th May '15 - 8:47am

    An Nhs trust needs to run at about 85% capacity in order to cope with predictable variation due to winter, viral outbreaks and staff turnover or illness. The funding model however implies that <100% at all times is inefficient. Thus no manager will be able to justify 100% staffing, even though this is cheaper than understaffing and blaming unforeseeable events, such as winter, for increased demand and agency staff use.

  • Jenny Barnes 30th May ’15 – 8:30am
    ” ……. The way the dockers dealt with the queue at the gates employment system was to unionise. The relationship between employer and employee in these cases is very far from equal.”

    Once again, Jenny Barnes, you have hit a nail very accurately on the head. Although I fully expect some LDV regulars to be choking over their cornflakes on reading such a word as “unionise”. Terribly shocking!

    The preposterous notion put forward by Charie that it is the workers who are to blame because they have not got theselves a good enough education and/or training is depressing. I wonder if he knows just how many people in low paid and zero hours jobs are in fact very well qualified? Does he think they chose low pay and insecurity rather than picking an excellent high salary job in engineering or in scientific research on a whim?

    However well qualified you are if the jobs are not available you have to take what comes or travel across the globe to try and find a job. Sometimes that does not work either. People from Poland with science degrees doing basic agricultural work in Norfok for example, how does Charlie explain that?

  • John Tilley
    It is not the qualifications a person possesses, it is the type of work one is undertaking. At the moment it is difficult to employ a bricklayer on less than £40K/yr. Being a waiter at most establishments is low skill, however to be a chef in an average pub is about £30K /y, more like £40K in London. Working as security guard in London does not pay well but leave the armed forces and enter the international security market one can earn £500/day, depending upon skills.

    The amount anyone earns depends upon the worth of one’s labour, harvesting vegetables and fruit picking is unskilled labour; one does not need a doctorate from IC or Cambridge. However, designing and building the latest tractors and harvesting machines is largely skilled and highly paid employment.

    As someone has said ” What do you say to someone with an arts degree? Big Mac and fries please”.

  • Charlie
    If you want to go on and on about people with Arts Degrees, feel free.
    But don’t confuse merely repeating your prejudice with with rational argument.

    If you have any evidence whatsoever that there is a preponderance of people employed on zero hours contracts with a degree in an Arts subject you could point to it.
    Or you could just confirm that your prejudice does not have anything to do with facts or reality.

    In the past I have had people work for me with science degrees, arts degrees and a lot of very capable and intelligent people who left school at sixteen, who have no degree or any other paper qualification. My experience of employing people leads me to believe you are totally wrong in your prejudice. My experience is that possession of a science degree does not necessarily guarantee a willing, capable or adaptable person who is automatically superior to everyone else Perhaps you have been unlucky in the people you have employed?

  • JohnTilley

    2012
    http://www.thecompleteuniversityguide.co.uk/careers/graduate-salaries-and-the-professional-premium/graduate-starting-salary/ Top Ten
    dentistry, chemical engineering, medicine, general engineering, mechanical engineering, economics, vet/medicine, aeronautical engineering, materials technology, physics and astronomy,

    2014
    http://www.thecompleteuniversityguide.co.uk/careers/what-do-graduates-do/what-do-graduates-earn/
    The top ten
    Subject
    Dentistry
    £30,681 –––
    Chemical Engineering
    £28,992
    Medicine
    £28,871 –––
    General Engineering
    £27,280
    Mechanical Engineering
    £26,197
    Economics
    £26,146
    Veterinary Medicine
    £26,045
    Aeronautical and Manufacturing Engineering
    £25,061
    Materials Technology
    £24,870
    Physics & Astronomy
    £24,504

  • Charlie

    A list of jobs and starting salaries is not a rational argument.

    It is evidence of nothing other than some people might be lucky enough to get such jobs. It is not a guarantee of employment that you one can list some starting salaries. It does not list those people who have decent qualifications and experience but do not have a job for which they are qualified and therefore have to get by picking fruit on a seasonal basis or serving coffee on a zero-hours, Mickey-Mouse arrangement.

    Can I refer you back to my original point ? —
    JohnTilley 30th May ’15 – 9:27am
    ” [Do you really believe that well qualified workers] ……chose low pay and insecurity rather than picking an excellent high salary job in engineering or in scientific research on a whim?

    However well qualified you are if the jobs are not available you have to take what comes or travel across the globe to try and find a job. Sometimes that does not work either. People from Poland with science degrees doing basic agricultural work in Norfok for example, how does Charlie explain that?”

  • “It is not the qualifications a person possesses, it is the type of work one is undertaking.

    As someone has said ” What do you say to someone with an arts degree? Big Mac and fries please”.” [Charlie 30th May ’15 – 11:22am ]

    That last sentence does seem to be a big dig at “the qualifications a person possesses” rather than the work they undertake. The issue with “art’s” first degree’s isn’t the degree per-say, but what the holder expects to do with it. Yes an art’s first degree is a big handicap if you wish to become a scientist, or enter a profession that normally take graduates with relevant degrees, but there are many jobs in technology and scientific companies that require the skills gained through studying for an arts degree. In fact a friend’s technology career took a big step forward after he had an involuntary year working in a bakery as it greatly enhanced both his people skills and his awareness of the his own skills which he had previously undervalued.

    The argument with respect to zero hours contracts, isn’t about the nature of the work, but more about “reforming society in the direction of the British-style Liberalism… with the powers of the state being used to ensure citizens are empowered within it and that the proceeds of our individual and collective endeavours are distributed fairly.” (source: Stephen Hesketh https://www.libdemvoice.org/video-tim-farron-talks-about-housing-46173.html#comment-360304).

    As for the argument that only that zero hour contracts only apply to unskilled jobs, I have to disagree. Back in the late 1990’s a rapidly growing IT consultancy, employed it’s highly skilled consultants, on effective zero hour contracts. However they weren’t expected to wait for the company to call them, but to be on the phone drumming up business…

  • As someone who works in the care sector I’ve ummed and aahed about ZHC’s throughout the last five years. On the one hand obviously I don’t want to see (usually) low-paid workers with irregular hours. On the other hand I don’t think disabled/elderly people should pay when they don’t receive a service (i.e. if they are in hospital/respite). Most workers appear to have regular clients and so have expected hours but might only work 80/90% of these if people are in hospital etc.

    My concern was that Labour’s outright ban would lead to providers just shunting extra costs onto disabled/older people (many of whom might no longer be able to afford services they need) so welcome this ‘halfway house’.

    If I might offer a criticism it appeared clear that the Labour message was ZHC contracts bad, and the Tories had exploitative ZHC bad other ZHC OK and there was no room for us to split the difference!

  • JohnTilley

    These are facts which support a rational argument, Supply and demand . It depends upon science degree, attitude of person, skill of English and many factors. Many employers requiring technically skilled people with right attitude.

    Geim and Novoselov born in Russia won Nobel Prizes for discovering graphene at Manchester . A foreigner may undertake unskilled work until something better comes along. Raymond Blanc’s story is from his website :-

    In the summer of 1972, Raymond arrived in England to work as a waiter at the Rose Revived restaurant in Oxfordshire. One day, when the chef was ill, Raymond took over the kitchen. At that very moment, his career was born. In 1977, Raymond opened his first restaurant, Les Quat’Saisons in Summertown, Oxford. It was an overnight success, winning Egon Ronay Restaurant of the Year, and two prestigious Michelin stars within a couple of years. – See more at: http://www.raymondblanc.com/raymond/biography/#sthash.SRnRqa1e.dpuf

    When the Tories were talking of putting caps on immigration , many employers argued against it as they needed to employ foreigners because Britain did not produce enough skilled people.
    I said
    “Zero hours contracts occur because the employer operates in a highly volatile market which is most likely low skilled service sector which is not a career one ideally wants to be in . The lower the skill required to do a job , the more likely one is going to encounter a bad employer.” Obtaining people with the skills to work as chefs in Michelin starred restaurant is more difficult than obtaining staff to work in pubs. One only has to watch “Rogue Trader ” to appreciate the lack of planning which is common amongst poorly skilled builders.

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