Zero-hour contracts – Employers may be forced to pay a premium rate for short notice work

Matthew Taylor was appointed by Theresa May last year to review employment practices in the light of concerns about the precarious nature of work, particularly in the gig economy.

Taylor has suggested that employers should pay an increased rate above the minimum wage if they called upon workers whose contract requires them to be on standby for work. This would give employers an incentive to guarantee more hours in advance, because it would cost them more to pay people for work that had not already been agreed.  Taylor believes that the proposal could stop ‘lazy’ employers from shifting all risks onto workers.

The number of people employed on zero-hour contracts has increased from 101,000 to 910,000 over the past year according to the latest available figures from the Office for National Statistics. Under the gig economy system, workers are paid for the specific ‘gigs’ they undertake rather than the hours they work. The gig economy has been criticised as a means of avoiding employment rights and companies such as Uber and Deliveroo are currently facing legal action.

Concerns that zero hour contracts give employers the upper hand has led unions to call for the Government to tackle the rise in such contracts. Taylor’s review will ‘consider the implications of new forms of work on worker rights and responsibilities – as well as on employer freedoms and obligations’.

If you think that this might affect your business and would like to discuss employment rights in this area, please contact a member of the Employment team.