Jeremias Prassl Associate Professor Magdalen College University of Oxford Zero-Hours Contracts The...
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Transcript of 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 Page 2
‘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?
I. Defining the Zero-Hours Contract
The Zero Hours ContractDr Jeremias Prassl Page 3
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)’
I. Defining the Zero-Hours Contract
The Zero Hours ContractDr Jeremias Prassl Page 4
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…
The Zero Hours ContractDr Jeremias Prassl Page 5
1. The ZHC as a new Phenomenon?
2. The ZHC as a Clear Set of ‘Atypical’ Work Arrangements?
I. Problematic Assumptions…
The Zero Hours ContractDr Jeremias Prassl Page 6
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…
The Zero Hours ContractDr Jeremias Prassl Page 7
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
The Zero Hours ContractDr Jeremias Prassl Page 8
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?
II. Zero-Hours Contracts & Employment Law
The Zero Hours ContractDr Jeremias Prassl Page 9
(-) MINIMUM RIGHTS
Protection attached to ‘Spot Contracts’
NMWA 1998; Working Time Regulations 1998
(though still some problems: eg last-minute shift cancellation)
Discrimination law
II. Zero-Hours Contracts & Employment Law
The Zero Hours ContractDr Jeremias Prassl Page 10
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]
II. Zero-Hours Contracts & Employment Law
The Zero Hours ContractDr Jeremias Prassl Page 11
(-) 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.’
II. Zero-Hours Contracts & Employment Law
The Zero Hours ContractDr Jeremias Prassl Page 12
(-) 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
II. Zero-Hours Contracts & Employment Law
The Zero Hours ContractDr Jeremias Prassl Page 13
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 Zero Hours ContractDr Jeremias Prassl Page 14
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]
III. ZHC as a Regulatory Challenge
The Zero Hours ContractDr Jeremias Prassl Page 15
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
III. ZHC as a Regulatory Challenge
The Zero Hours ContractDr Jeremias Prassl Page 16
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:
The Zero Hours ContractDr Jeremias Prassl Page 17
Num
ber
of
ZH
Cs
in
LFS
Source: Authors’ calculations from the LFS and Google Trends
III. ZHC as a Regulatory Challenge
The Zero Hours ContractDr Jeremias Prassl Page 18
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.
III. ZHC as a Regulatory Challenge
The Zero Hours ContractDr Jeremias Prassl Page 19
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
III. ZHC as a Regulatory Challenge
The Zero Hours ContractDr Jeremias Prassl Page 20
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)
The Zero Hours ContractDr Jeremias Prassl Page 21
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)
The Zero Hours ContractDr Jeremias Prassl Page 22
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?
The Zero Hours ContractDr Jeremias Prassl Page 23
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?