Vince Cable sets out to tackle abuse of zero hour contractors

A new UK bill takes a closer look at employment law giving more strength to whistle-blowers and ensuring enforcement of minimum pay levels.

Vince Cable, the UK Business Secretary, has taken aim at the abuses of zero hour contracts in the Small Business, Enterprise and Employment Bill. The Bill, introduced to the UK parliament, is designed to reduce the barriers that can hamper the ability of small businesses to innovate, grow and compete.

It paves the way for the UK Government to be more supportive of small business in the UK, but it also makes important changes regarding employment law.

Malcolm Mackay, the chairman and founder of United Employment Lawyers, said: “This is an important piece of legislation, which will have a positive impact on the modern work environment in Scotland and the rest of the UK. We will be watching its progress with great interest.”

“I am pleased to see that there is more clarity on zero hour contracts – so there is no room for unscrupulous people exploiting conditions of employment which, if implemented fairly, can benefit both employer and employee,” he said.

The Bill will introduce measures to reform whistle blowing procedures to achieve a consistent standard of best practice for handling disclosures and provide greater reassurance to the whistle-blower that proper action is being taken.

The bill sets out to deter business non-payment of employment tribunal awards by creating stronger financial consequences of non-payment.

It will reduce the delays in Employment Tribunals caused by frequent and short notice postponements, while addressing the costs arising from short notice postponements, and increase the penalties imposed on employers that underpay their workers in breach of the national minimum wage legislation on a per worker basis.

According to the Bill, an enforcement officer will give a 28-day warning notice if a tribunal award remains unpaid. If the monies are not then paid by the company or respondent, a penalty notice will be issued. The penalty is 50% of the outstanding amount, up to a maximum of £5,000. If the full sum, and the penalty, are then paid within 14 days, the penalty is reduced by 50%. The penalty is payable to the Secretary of State.

But it takes a strong stance on zero hour contracts. It will make exclusivity clauses in zero hours contracts invalid and unenforceable so that no one is tied into a contract without any guarantee of paid work. This will enable employers and employees to benefit from the flexibility of zero hours contracts whilst addressing abuse of these contracts.

It will also recover exit payments from public sector employees that leave and re-join the same part of the public sector within a year.