Zero Hours Contracts & National Minimum Wage

No comments Employment

Just before the election the government announced on 26 March 2015 that it had banned exclusivity clauses in zero hours contracts.  As we correctly reported at the time, this wasn’t strictly true as although the legislation which was intended to ban zero hours contracts, the Small Business, Enterprise and Employment Act 2015 (SBEE), was introduced on 26 March the parts which dealt with zero hours contracts needed a commencement order to become law.

Today, 26 May 2015, that commencement order has been issued (and here it is for those that like that sort of thing: ).

What are zero hours contracts?

A zero hours contract is defined in the legislation as a contract where the worker or employee agrees to perform work ‘conditionally on the employer making work or services available to the worker and there is no certainty that any such work or services will be made available to the worker‘ i.e. the worker is not guaranteed any work but agrees to work has been offered.

Exclusivity Clauses

Section 153 of SBEE renders unenforceable any clause which prohibits a worker from being employed by someone else.

Further legislation is expected which will prevent employers from penalising employees who work for others and underpin the legislation.

Other changes

The commencement order also increases the fine for non-payment of the national minimum wage (currently £6.50 per hour for those aged 21 and above) to £20,000 per worker.  The national minimum wage legislation contains a number of quirks which can easily catch employers out as has been shown by the number of employers who have been fined since ‘naming and shaming’ has been introduced

If you need advice about any of this issues in this blog please contact us.