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Analysis: Zero-hours contracts to remain

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Rebecca Kincade on February 20, 2015 - 9:25 am in In Depth

Employment Minister Stephen Farry has reviewed the use of zero-hours contracts in Northern Ireland and decided that an outright ban would have a ‘disproportionate impact on the flexibility of the economy’.

A contract of this nature allows an employer to hire staff with no guarantee of work.

Dr Farry has, however, proposed to outlaw contracts that contain exclusivity clauses. This means that the 28,000 people currently employed here under zero-hours contracts will no longer be prevented from working for other employers.

Commenting on the announcement Rachel Penny, employment law partner at law firm Carson McDowell said: “It is good news that we now have some clarity on the issue of zero hours contracts and overall I believe it is also good news that these types of contracts will not banned, as they provide a flexible option for many employers.

“The Minister’s plan to ban exclusivity clauses – which prevent people working for other employers even though their hours are no guaranteed– is also welcome as it is through the use of such clauses that most abuse of zero hours contracts takes place. Some employers who use exclusivity clauses for reasons of confidentiality may have to rethink their arrangements, but for the most part, there is no reason someone working in a hospitality or retail job should not be allowed to work for another similar company.

“The Minister’s proposal to ask employers to provide justification for not moving employees onto permanent contracts with guaranteed hours after six months, could prove more problematic. It puts the burden on employers at a time when few businesses can afford the time and resources associated with more red tape and simply risks the termination of the zero hours contract before the six month mark. Similar proposals to convert zero hours contracts to permanent, guaranteed hours contracts were rejected by parliament in GB.”

CBI Northern Ireland Director, Nigel Smyth, said: “Our flexible labour market has kept unemployment down, and zero hours contracts play an important role in providing job opportunities for people who want flexibility such as students, parents and carers. CBI Northern Ireland members support a ban on exclusivity clauses in zero hours contracts – this is a proportionate response to tackling examples of poor practice, and strikes the right balance between flexibility for both employers and workers.

“We would however urge caution to the Minister’s proposals that after six months an employer would have to provide an objective reason as to why a person should not be moved off a zero hours contract to a more formalised contract. We believe this will put jobs at risk and create significant difficulties in terms of defining qualifying periods and regular working patterns. This may be unworkable and counterproductive.”



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