The Government attempted to deal with the "zero hours" contracts issue by passing legislation which came into force on 1 April 2016.
The legislative change does not make casual employment unlawful, as an employee in casual employment is entitled to accept or decline any work offered. However, the new legislation is intended to address employment agreements which say an employer is not required to offer any hours of work, but say the employee must accept them if they are offered. This sort of employment agreement is what is colloquially known as a “zero hours” contract, although there is no legal definition of a “zero hours” contract.
The new legislation applies to all employment agreements entered into after 1 April 2016. The new rules apply to existing employment agreements from 1 April 2017 and to existing collective agreements once they are renegotiated.
The legislation essentially does away with “zero hours” contracts. It still permits an employer to require employees to accept work the employer makes available, but employers wishing to do this must have an availability provision.
An availability provision basically means a provision requiring an employee to accept hours of work offered by an employer where the employer is not required to offer those hours of work. If the employee may decline the hours of work offered, no availability provision is needed.
An availability provision may only be included where there are genuine reasons, based on reasonable grounds, for including such a clause in an employment agreement.
Further, an availability provision may only be included in an employment agreement that sets out minimum, guaranteed hours of work and should only apply to hours of work over and above those minimum, guaranteed hours of work. The availability provision must also provide for reasonable compensation for the employee being available.
There is a list of factors to take into account in determining whether there are genuine reasons, based on reasonable grounds, for including an availability provision and to determine what reasonable compensation is. There is no definition of reasonable compensation.
If an employee’s employment agreement does not contain an availability provision, an employee may refuse work over and above the minimum, guaranteed hours of work and an employer can’t discipline the employee or take other action.
There are also new rules in respect of cancelling shifts. If an employee undertakes shift work, an employer may not cancel a shift without giving the employee reasonable notice of the cancellation, or without paying reasonable compensation if notice is not given. What constitutes reasonable notice and reasonable compensation depends on the circumstances, but must be set out in the employee’s employment agreement.
There is a definition of “shift work” provided. A “shift” means a period of work performed in a system of work in which periods of work are continuous or effectively continuous; and may occur at different times on different days of the week.
Unfortunately, the new legislation is quite unclear in parts, so the courts will no doubt be kept busy trying to interpret what the legislators meant. If you need advice about interpretation in the meantime, please let us know.