Labour party plans to outlaw zero hours contracts

The Labour party has announced plans to ban zero hour contracts if they win the general election in June.

Zero hours contracts are contracts between a business and a casual worker in which the business does not guarantee to provide any minimum level of work to the worker. These types of contracts have been a hot topic in recent years and their critics cite them as an example of big business taking advantage of vulnerable workers. In a climate where the working conditions at firms like Sports Direct and Uber are coming under great scrutiny, Labour’s announcement seems to be designed to appeal to British workers.

This would not be the first time that a political party has used zero hours contracts to appeal to voters. During the Conservative/Lib Dem coalition, Vince Cable introduced a ban on exclusivity clauses within zero hours contracts to prevent businesses from restricting zero hours workers from working for other business. This ban took effect from May 2015.

The ban on exclusivity was hard to disagree with and appeared to eradicate the biggest potential risk of abuse. However, union leaders continued to campaign for an outright ban and it now appears that their wishes will be granted should Labour come out on top in the general election.

As with all political issues, there are two sides of every story. For every worker who feels exploited by zero hours contracts, there is another who praises the flexibility such an arrangement gives them to juggle education or family commitments around their job.

The Labour pledge on zero hours contracts is just part of a set of 20 proposed policies aimed at ending what Labour call the “rigged economy.” The package also includes promises to increase the minimum wage to match the national living wage (expected to increase to at least £10 an hour by 2020) and to introduce a maximum 20:1 pay ratio between the highest and lowest earners within public sector employers or within companies bidding for public sector contracts.

Would Labour’s proposals affect your business? If so, and you’d like to discuss further, please feel free to contact our Employment team on 0161 926 9969 or employment@mlplaw.co.uk.