Zero-Hour Contracts: Regulation (P.100/2013): Amendment

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A decision made 16 September 2013:

Decision Reference: MD-S-2013-0089
Decision Summary Title :	Zero hour contracts Lodge amendment P100 2013		Date of Decision Summary:	16 September 2013
Decision Summary Author:	Policy Principal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Zero hour contracts Lodge amendment P100 2013		Date of Written Report:	16 September 2013
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Amendment to P.100/2013 Zero-hour Contracts: Regulation
Decision(s): The Minister decided to lodge an amendment to P.100/2013 and instructed the Policy Principal to arrange for the amendment to be lodged on 17 September, for the scheduled States debate on 24 September 2013.
Reason(s) for Decision: In addition to simplifying the Proposition, the main reasons for the proposed amendments are as follows; - The Minister has responsibility for the relevant legislation (the Employment (Jersey) Law 2003) and so, with the agreement of the Chief Minister, the responsibility has been attributed solely to the Minister. - The Statistics Unit is independent of the Chief Minister and there is no requirement for the Chief Minister to have specific oversight of the collection of this data. - Deputy Southern states in his accompanying report that the Proposition asks the Chief Minister to “consider whether regulation is needed, and if so, to bring such regulations”. The Proposition in fact asks the Chief Minister to create a regulatory system to control zero hours contracts, irrespective of whether any need to do so has been established by parts (a) and (b), and irrespective of whether the use of such contracts is genuine. - Paragraph (c) of Deputy Southern’s Proposition would require the Minister to work with the Jersey Advisory and Conciliation Service (JACS). This is replaced in the new paragraph (c) with a requirement to consult stakeholders generally. Whilst JACS input will be valuable, other stakeholders would be consulted, including trade unions and employers’ associations.
Resource Implications: The proposed amendment to the Proposition brings no additional resource implications. With regard to the Proposition itself, an impact study, as described in paragraph (b), is expected to be achieved by the commissioning of independent research which would bring a cost. Until the scope of the impact study has been more clearly defined and data has been collected in accordance with paragraph (a), it is not possible to estimate the cost of paragraph (b).
Action required: Policy Principal to request the Greffier of the States to arrange for the amendment to P.100/2013 to be lodged “Au Greffe” on 17 September 2013.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Zero-Hour Contracts: Regulation (P.100/2013): Amendment

ZERO-HOURS CONTRACTS: REGULATION (P.100/2013) – AMENDMENT

REPORT

The main reasons for the proposed amendment to the Proposition are as follows;

- The Minister for Social Security (the ‘Minister’) has responsibility for the relevant legislation (the Employment (Jersey) Law 2003) and so, with the agreement of the Chief Minister, the responsibility has been attributed solely to the Minister.

- The Statistics Unit is independent of the Chief Minister and there is no requirement for the Chief Minister to have specific oversight of the collection of this data.

- Deputy Southern states in his accompanying report that the Proposition asks the Chief Minister to “consider whether regulation is needed, and if so, to bring such regulations”. The Proposition in fact asks the Chief Minister to create a regulatory system to control zero hours contracts, irrespective of whether any need to do so has been established by parts (a) and (b), and irrespective of whether the use of such contracts is genuine. We must identify what the issues are before deciding if, and how, those issues might appropriately be tackled.

- Paragraph (c) of Deputy Southern’s Proposition would require the Minister to work with the Jersey Advisory and Conciliation Service (JACS). This would be replaced in the new paragraph (c) with a requirement to consult stakeholders generally. Whilst JACS input will be valuable, other stakeholders would be consulted, including trade unions and employers’ associations.

The President of the Jersey Chamber of Commerce and Unite’s Regional Officer for Jersey have publicly expressed their opposing perspectives to this Proposition; on the one hand, defending the correct use of such contracts as allowing employers to offer vital jobs [1], and on the other hand, by calling for zero hour contracts to be abolished [2].

Valid zero hour contracts remove mutuality of obligation so that work is offered and accepted on a casual basis. Zero hour contracts have been criticised because of the lack of certainty that they provide to employees but, when used appropriately, such contracts can provide flexibility for both employees and employers.

JACS has cautioned that using a zero hour contract is unlikely to enable an employer to avoid their obligations under the Employment (Jersey) Law 2003. Even in the case of a genuine zero hour contract, employees have employment rights, including the right to be paid the minimum wage and receive holiday pay (which is often given as rolled-up holiday pay). Where a zero hour contract is misused, an Employment Tribunal is likely to see through the written terms of the contract to the reality of the situation.

There is concern in the UK about the increasing use of zero hour contracts in many areas of the economy. The UK’s Office for National Statistics (ONS) has estimated that the number of people working under a zero hour contract arrangement in December 2012 had grown by 100,000 to 250,000 since 2009 [3]. Research undertaken by the Chartered Institute of Personnel and Development (CIPD)[4] and Unite [5] has lead to estimates that the actual number may be between 1 and 5.5 million.

The UK Government is currently reviewing the use of zero hour contracts and an information gathering exercise, including consultation with stakeholders, is expected to conclude in September 2013. The outcome of that exercise is likely to be of relevance to the investigation undertaken in Jersey.

The States of Jersey Statistics Unit intends to investigate issues relating to zero hours contracts through its suite of business and household surveys. Such work will involve surveying businesses to estimate the overall scale and sectoral distribution of the use of zero hour contracts in Jersey, and will also aim to measure the proportion of workers engaged on such contracts who were actually employed within a given time period as well as the average numbers of hours worked. It is anticipated that a complementary perspective will be gained by also surveying households. Such an approach will aim to examine subjective and practical issues for individuals who are engaged on zero hour contracts.

The report accompanying the Proposition recognises that it will take some time to achieve statistically significant information. The Chief Statistician anticipates that the timescale for producing statistically robust results is approximately twelve to fifteen months, i.e. by the end of the calendar year 2014. Those results will form the basis for us to consider what further action should be taken and in what time frame.

Financial and manpower implications

The Deputy has stated that there are no financial or manpower implications arising from this Proposition. It is anticipated an investigation into the extent to which zero hour contracts are used, as described in paragraph (a), can be contained within departmental resources. An impact study, as described in paragraph (b), however, is expected to be achieved by commissioning independent research. Until the scope of the impact study has been more clearly defined and data has been collected in accordance with paragraph (a), it is not possible to estimate the cost of paragraph (b). The proposed amendment to the Proposition brings no additional resource implications.

[1] www.jerseychamber.com/news/president-s-message----august

[2] www.thisisjersey.com/business/2013/09/06/union-on-attack-over-zero-hours-contracts-abuse/

[3]www.ons.gov.uk/ons/guide-method/method-quality/specific/labour-market/articles-and-reports/index.html

[4] www.cipd.co.uk/blogs/cipdbloggers/b/mark_beatson/archive/2013/08/22/Zero-hours-working.aspx

[5]www.unitetheunion.org/news/research-uncovers-growing-zero-hour-subclass-of-insecure-employment/