Zero Hours Employment Contracts – What are they?

Zero Hours Employment Contracts are a form of contract that enable employers to have workers on call to work when required but do not guarantee a set number or even a minimum number of hours. Employees are only paid for the time they work and therefore these types of contract are often seen as a cost effective solution for companies that need staff to be readily available but where hours of work vary widely from week to week. They are also often used by agencies that supply temporary workers. The employment agency is legally the worker’s employer but, as the agency cannot always guarantee work these types of contract allow them to have a pool of workers available from which they can supply client companies.

Notwithstanding the lack of guarantees in terms of hours, where employment rights are concerned, workers have the same statutory rights as any other worker, albeit on a pro rata basis. These include holiday and sick pay and equal pay after 12 weeks of working. Workers also have the usual protections in the areas of equality and unfair dismissal.

The exact number of workers in the UK on Zero Hours Employment Contracts is difficult to assess. The Office for National Statistics has put the figure at around 250,000 workers (0.84 percent of the workforce), but the Chartered Institute of Personnel Development (CIPD) estimates the prevalence to be far higher, with around 19 percent of employers having at least one person on a Zero Hours contract (equivalent to 4 percent of the workforce). The CIPD found that industries where Zero Hours Employment Contracts are common include hotels, catering and leisure, education and healthcare. In addition, larger organisations – those with 250 employees or more – are more likely to employ workers on this basis.

Zero Hours Employment Contracts have come in for criticism by opposition politicians and by unions. Labour leader Ed Miliband has called for a ban on any contracts that exploit workers and Donna Hutton, Unison regional organiser has said: ““Casual work should only be used in emergency situations as staff don’t know if they will be working the next week. For some people it works but it doesn’t for the majority.” For the government, Business Secretary Vince Cable, has promised a review of the area and said that he will consider legislating against situations of abuse.

Zero Hours Employment Contracts have raised some debate for a number of reasons. There are concerns that employees are left vulnerable to financial hardship due to the uncertainty of earnings and lack of security offered. Some have warned that managers may threaten to withhold hours of work as a way to control workers. Moreover, where employees cannot show a guarantee of earnings they may find it difficult to obtain credit in the form of mortgages, loans or even current accounts. Individuals may also have less freedom to take time off to go on holidays as they are required to be available under these types of contract.

However, some industry figures have pointed out the benefits of Zero Hours Contracts, particularly for those seeking an additional income that fits around other activities, such as students, carers and parents of young children. CIPD CEO Peter Cheese said:  ‘… the assumption that all zero hours contracts are “bad” and the suggestion from some quarters that they should be banned should be questioned… Zero hours contracts, used appropriately, can provide flexibility for employers and employees and can play a positive role in creating more flexible working opportunities.”

Settlement Agreements V Compromise Agreements

Settlement Agreements came into effect on the 29th of July 2013.

From 29 July 2013Compromise Agreements have been replaced by Settlement Agreements.

Settlement Agreements are, on the face of it, the same as Compromise Agreements, albeit with a new name; the same conditions need to be satisfied for them to be legally binding and they have the same effect of terminating the employment relationship whilst compromising an employees’ employment rights.

Settlement Agreements are recognised by statute and they are an exception to the general principle set out in all employment legislation that an individual cannot contract out of their statutory employment rights. They are the only way in which an employee can contract out of their rights under employment law. They enable employees to agree to compromise their own statutory employment rights in return for compensation. The main employment rights most often compromised relate to withdrawing an existing, or subsequently refraining from bringing a claim to an Employment Tribunal and/or the courts.

A Settlement Agreement (formerly known as a Compromise Agreement) is a legally binding contract between an employee and employer which is used to end an employment relationship on agreed terms. In return, the employee generally receives a financial settlement and an agreed form of reference.

In other words, a Settlement Agreement is an agreement which enables an employee and the employer to agree that the employee will not bring a claim to the employment tribunal and/or the courts against the employer about the issues covered in the agreement in return for a compensation payment. Without a Settlement Agreement if the employee and employer end their relationship, the employee has the right to take a case to the employment tribunal and/or courts if there are grounds to do so.

There is a range of scenarios in which Settlement Agreements are used. Settlement Agreements can be used to end an employment relationship on agreed terms. They can also be used to resolve an ongoing workplace dispute. Settlement Agreements are often used to safeguard the interests of both employer (who gain certainty they won’t face a tribunal case on any of the grounds covered by the agreement) and employee (who gets a payment and avoids a dismissal in their employment history).

Settlement Agreements can be proposed by either an employer or an employee and they are voluntary, the parties do not have to agree to them or enter into discussions about them if they do not wish to do so. Equally the parties do not have to accept the terms proposed to them.However,once a valid settlement agreement has been signed, the employee will be unable to make an employment tribunal claim about any type of claim which is listed on the agreement.

Prior to 29th July 2013, Settlement Agreements were known as Compromise Agreements.

In practice, there is little difference between a Compromise Agreement and a Settlement Agreement. The main difference between the two is that Compromise Agreements provided limited protection as the “without prejudice” principle applies only to pre-termination discussions entered into between an employer and an employee where there is an existing employment dispute between the parties. Without prejudice is a common law principle which prevents statements (written or oral) made in a genuine attempt to settle an existing dispute from being put before a court as evidence against the interest of the party which made them.

In other words, in order to benefit from the without prejudice protection there must be an existing employment dispute between the parties before pre-termination discussions take place; without a formal dispute the without prejudice principle does not apply. In fact if no dispute exists pre-termination discussions are not covered by the without prejudice principle and they can be referred to in a subsequent tribunal claim.

Settlement Agreements introduced the concept of “confidential” pre-termination discussions. As stated above, to benefit from the without prejudice protection so that such discussions cannot be used in any subsequent tribunal proceedings, there has to be an existing employment dispute before the discussions take place. Since there are often occasions where either the employer or the employee want to enter into pre-termination discussions where there is no existing dispute, the concept of “confidential” pre-termination discussions have been introduced with the intention of encouraging employers and employees to enter into settlement agreements.

Under the new Settlement Agreements pre-termination discussions where there is no existing dispute are confidential and cannot be used as evidence in unfair dismissal claims. Thus, employers and employees are now able to enter into pre-termination discussions without fear of such discussions being used as evidence in subsequent employment tribunal proceedings, in circumstances where there is not an existing dispute.

Pre-termination discussions/negotiations are defined as “any offer made or discussions held, before the termination of employment in question, with a view to it being terminated on terms agreed between the employer and the employee”. Under the new Settlement Agreements such discussions/negotiations are kept confidential whether there is, or is not, an existing employment dispute, or where one or more of the parties is unaware that there is an employment problem. Furthermore where there is an existing dispute between the employer and employee, both the ‘without prejudice’ and new statutory confidentiality provisions will apply, as the new “confidential” and the existing “without prejudice” rules run concurrently.

To obtain the new “confidential” protection, pre-termination discussions must only be used in circumstances involving a “straight forward” unfair dismissal claim. Pre-termination discussions are not protected if the employee has been dismissed for an automatically unfair reason. Employees are not prevented from bringing claims in relation to ‘automatically unfair’ dismissals, such as for whistleblowing, trade union membership or asserting a statutory right, by virtue of having entered into a Settlement Agreement. The confidentiality provisions also do not apply to grounds other than unfair dismissal, such as claims of discrimination, harassment, victimisation or claims relating to breach of contract.

Furthermore, the “confidential” protection also does not apply where there is “improper behaviour” by one of the parties, in which case the tribunal will allow evidence to the extent that it considers it “just”. Improper behaviour, by either an employer or employee, includes all forms of harassment, bullying and intimidation; physical assault or the threat of physical assault; victimisation; discrimination; and putting undue pressure on a party, which can include not giving an employee sufficient time to consider an offer.

Consequently, in the instances above, an employee can use the contents of pre-termination discussions as evidence to support their claim.

To assist employers, employees and their representatives understand the implications of the changes introduced to the Employment Rights Act (ERA) 1996 in relation to negotiation of settlement agreements; ACAS have produced a Code of Practice on Settlement Agreements (“the Code”). The Code is statutory, but failure to follow it does not entitle an employee to bring a claim for this reason alone.

In order for a Settlement Agreement to be valid it must comply with stringent statutory conditions. There are strict and well-defined requirements to be fulfilled to ensure that a Settlement Agreement is valid. A correctly structured Settlement Agreement will be legally binding on both parties.

The following conditions must be satisfied in order for the Settlement Agreement to be valid. If these conditions are not satisfied then the Settlement Agreement is not legally binding:

·         The agreement must be in writing.

·         The agreement must relate to a particular complaint or proceedings

·         The employee must have received independent legal advice on the terms and effect of the proposed agreement

·         The agreement must identify the adviser

·         The adviser must be covered by a suitable insurance policy. The policy must cover the adviser against the risk of a claim for losses because of the advice that has been given

·         The agreement must state that the applicable statutory conditions regulating the settlement agreement have been met.

The Code requires that employees should be given a reasonable amount of time to consider the proposed conditions of the agreement and specifies a minimum of 10 calendar days unless the parties agree otherwise.


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TUC Claims Unemployment Could Be Twice Official Figure

According to data supplied by the Trades Union Congress, the number of unemployed people in the UK announced by the official statistics is not the actual one. In fact they appear to be almost twice more.

In the announcement of the TUC, an organisation representing the majority of UK trade unions, apart from the 2.56 million people whom the Office for National Statistics said were the only unemployed, there were other 2.26 million more who are economically inactive so they were not counted. The Legal Stop is trying to help by providing high quality employment documents and a free job application form.

“Unemployment may have started to fall in recent months but we are still in the midst of a job crisis,” said the TUC’s general secretary, Frances O’Grady. “The true scale of unemployment is far bigger than official figures suggest, as nearly five million people say they want work today.”

She added that the situation at the labour market was far from the desired one with a further 1.4 million people who needed a full-time job but found no other option but start part-time work with the only aim to earn some money.

In her view the information supplied that there was a drop in unemployment rates was not true. The 46,000 people who were said to have found jobs, have started something with just a few hours and in most cases with zero hour contracts.

However, according to the employment minister, Mark Hoban, the unions were not able to bear the economic growth. He pointed out the fact that the unions were out of touch because they did not welcome even the news about the high rates of employment.



Emphasis On Queue Times Causing Border Staff To Neglect Other Duties

A recent report pointed that the pressure at the UK borders was too high so staff there were made to cut down on searches in order to reduce queues and perform full passport checks.
The pressure had to be lowered during the Olympics last year, when the home secretary Theresa May used to receive current information about the queues every day.

These measures led to cutting queue times and now the Border Force tries to keep this achievement.
Some say these measures are not right because many duties need to be neglected so that the queue time drops. Some of the things missed are searching vehicles for illegal immigrants and checking travelers for contraband.
According to NAO these changes could mean that queues are more important than some aspects of performance which may later turn out to be dangerous.
The home secretary has to be informed about any failure to carry out a full passport check.

If you need any business document templates for the UK, consider dowloading them from our website.
In the words of Labour, the lack of sources was to be blamed for the failings.
Between April 2010 and March 2012, Border Force staff fell from 8,023 to 7,527 but funding will be increased for the next year so the number of staff is planned to reach 8,477.
Margaret Hodge from the public accounts committee commended the Border Force for reducing queuing times at the Olympics, but added: “…it is deeply worrying that this came at the expense of its other responsibilities, particularly customs. The Border Force must be able to check both goods and passengers at the same time – border security cannot be an either/or choice.”
Immigration minister Mark Harper blamed the previous government for many of the current problems.



Number Of Workers Earning Less Than Living Wage On The Rise

Due to figures from think tank only for the last year 20% of the workforce in the UK which is about 4.8m people have claimed they earned below the so-called living wage. This means their number has risen too fast. The Resolution Foundation conducted a research the results of which point out that 25% of women and 15% of men who are employed did not manage to cover their basic needs for living in April 2012. This is the last month the search covered.

Since 2009 the number of employees receiving under the living wage had gone up by 3.4 million.

However, there are many different groups of workers who earn much less than the living wage. The worst results have been accounted for those under the age of 20 who go to work. In 77% of the cases they have received salaries far away from what they had expected. The other risk group is of the people working in restaurants and hotels.

London’s living wage is now £8.55 in London and £7.45 elsewhere.

Matthew Whittaker, report author and senior economist at the Resolution Foundation, said: “For most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the living wage.”

He added that all the parties need to think carefully about the proper way which would lead to boost in the rates of pay.In addition may be this should be written into the employment contract.

The answer that came from the government was that they were in fact encouraging all employers to give their workers much more money than the national minimum wage.

The spokesman added:

“Despite being in tough times, this Government is doing absolutely everything it can to help people on low pay with the cost of living.”


Conservatives Looking At Ways To Increase Minimum Wage Payments

Soon the Conservative Party is expected to propose new ways which will lead to an increase of the minimum wage.

Sources that provided this information to BBC Newsnight, claim that the party was trying numerous different methods which would ensure people better wages.

One of the things which most probably be proposed is that companies paying their workers more than the minimum wage gain the possibility to pay lower taxes.

However, the Low Pay Commission insists on harsh and immediate actions. It demands an increase in the minimum wage as soon as possible and does not agree with the idea of lower taxes for businesses.

The government did not in fact like the mentioned approach so it is almost sure it will not come to pass.

The minimum wage is now £6.19 an hour and it is expected to rise to £6.31 in October. In the mean time, you can review our employment documents.

At the same time there will be serious welfare cuts from this autumn so the government wants to be sure people will in fact have the means in order to take care of themselves.

Other resources appeared claiming that minimum wage would not be changed soon but will probably stay at the list of priorities for the next Conservative manifesto.

In the opinion of part of the Conservatives most business bosses would be against such a new policy.

On the other hand, the people who are pro the new policies on the minimum wage said they hoped these would start functioning as soon as possible.

Figures show that the number of people who worked for the minimum wage in 2012 is 1.4 million.



TUC Slams Failure Of Agency Worker Equal Pay Laws

In the opinion of the Union federation the TUC, the UK did not manage to create such laws which to ensure that all agency workers are paid equally. The aim of the current European directive is to ensure that agency workers get the same salaries as full-time staff in case they work for a company for more than 12 weeks. However, this does not function in the way it was planned to.

TUC also said that when agencies directly employed workers they might in fact not receive the same amount of money as those who were employed by the company.

This bothered the TUC and it complained to the European Commission with the statement that such types of contracts needed to be banned because they exploited workers.

General secretary of the Trades Union Congress, Frances O’Grady, said that the regulations which are now functioning changed the situation for better and many agency workers admitted the working conditions had improved and all this happened without any dismissals.

Unfortunately, more and more employers ignore the regulations and appoint workers exactly in the way they should not.

“Most people would be appalled if the person working next to them was paid more for doing the same job, and yet agency workers on these contracts can still be treated unfairly.”

Kevin Green, the chief executive of the Recruitment and Employment Confederation, said to the BBC that the most important thing was the creation of more working places. In his view, regulations should be respected and not changed constantly just because somebody did not like them.


Work Programme Not Doing Enough for Sick and Disabled

According to the providers of the government’s flagship Work Programme, the scheme does not have so incomes so that to take care of the sick and disabled jobseekers into employment.

Figures of the BBC show that only a third of those who have been on the scheme, for at least a year, have later found a permanent job.

However the percentage of those from the most challenging group who have found work is only 10%.

The association representing the providers announced that people receiving ESA have complex health and skills requirements so the Work Programme can not manage to solve all their problems.

“The costs of helping jobseekers on ESA back into work are significant and cannot all be met by the Work Programme,” says the Association’s chief executive, Kirsty McHugh.

The Department for Work and Pensions stated it had already agreed with Work Programme providers to support them financially.

These jobseekers have many barriers in front of them which was proved by the figures of ERSA pointing out that about a quarter of them have been unemployed for at least 11 years.

However, the opinion of the Labour Party is that the fact the Work Programme asked for so much money meant there was something wrong with it.

Liam Byrne, the Shadow Work and Pensions Secretary, said this in fact showed that the system was not working properly and the government did not make any efforts in order to fix it: “Three quarters of unemployed on the scheme haven’t even started a job, and half of young people still haven’t found their way into a single day’s employment.”

The 58 years old Julia Page, who had not worked for more than 30 years because of her clinical depression and anxiety, and has now spent more than 12 months learning how to attend an interview.

“It takes a heck of a lot of time to get through it but unless the government is willing to help, people like me and others aren’t going to have that support and I will end up back on the dole.”




Portas High Streets still Struggling

The number of the occupied retail units of ten out of the 12 government-funded “Portas Pilot” towns has fallen.

The government had awarded them £1.2m and access to the retail guru Mary Portas.

The results from the High Street Innovation Fund one year later point out that only in seven towns the number of shop vacancies has gone down, but more shops overall have closed than opened.In this case may be we need to prepare special employment contract templates, which will feature such a clause.

The 12 pilot areas are Bedford, Croydon, Dartford, Greater Bedminster, Liskeard, Margate, Market Rasen, Nelson, Newbiggin-by-the-Sea, Stockport, Stockton-on-Tees and Wolverhampton.

The initial idea of the “Portas Pilots” was to make people get back to their local shops.

Signs of improvement were noticed only in Bedminster and Margate.

Local traders from Stockton-on-Tees shared that their businesses would most probably be gone by the time the funding is being spent.

Director Matthew Hopkinson said: “If more shops close than open, then that’s when you start to see the decay of the High Street and also a rise in vacancy rates.”

The Local Data Company carried out the research.

It showed that shoppers were in fact confused by the rapidly changing environments on the High Streets so they usually did not come back.

The number of vacant shops has fallen in Newbiggin-by-the-Sea, Liskeard, Bedminster, Margate, Dartford, Bedford and Wolverhampton.

Mary Portas told You and Yours: “There is no simple solution to the crisis on our High Streets. There are no quick fixes but 400 towns up and down the country are working on different plans to try and reinvigorate their High Street.”


MPs Challenge Google Over UK Tax Reporting

Whistleblowers told Margaret Hodge, the chair of the Public Accounts Committee that Google had sold advertising within the UK and invoiced customers in the UK

Earlier Google had announced that UK customers were giving money for the Irish Google.

“No one in the UK can execute transactions,” said Google’s head of sales in Northern Europe, Matt Brittin.

He claims that “no money changes hands,” not considering the fact that he in fact employed sales staff in Britain with employment contracts.

Later Ms Hodge announced that the documentation showed clearly that the entire trading process and sales process took place in the UK.

She read from the official guide to parliamentary procedure, Erskine May: “A person prevaricating or giving false evidence can be considered to be in contempt of the House.”

She added that whistleblowers would not disappear until the whole truth about it is being revealed.

The worth of Google’s sales in the UK is £3.2bn but the major part of them came from Dublin as it gave £6m in UK corporation tax only in 2011.

It is a fact that Mr. Brittin mentioned, that each adviser in Europe would be glad to deal with

Google in Dublin, which provides job to about 3,000 people.

He said that as soon as they had come to Europe they had taken the decision that Dublin would be their headquarters.

The motive he pointed out was their wish to have access not only to the customers from the UK but to those from whole the Europe. The only way to achieve that was through Ireland as this was the place where intellectual property sat.