Jersey’s States Assembly has voted to ban exclusivity clauses in zero hours contracts, rendering such clauses unenforceable in law.
Carla Benest, Partner and Head of Jersey Employment practice at Mourant, comments on the key implications.
“A zero hours engagement is where there is no minimum requirement for an individual to do any work for the hiring business. In the United Kingdom the difference between employees, who enjoy full employment rights, and workers, who enjoy some but not all of the rights afforded to employees, is distinguished but there is no statutory concept of a worker in Jersey. An individual is either an employee or not.
An essential ingredient of a conventional employment relationship is that the employer is obliged to provide work and the employee is obliged to accept it – this is referred to as mutuality of obligation.
The nature of a zero hours contract is that the individual has no guarantee that work will be provided to them; typically they are called on to work on an as-needed basis. Without mutuality of obligation, therefore, how can there be a concept of a zero hours employment contract?
Under the law, there are two types of employee in Jersey – a person who works for another person under a contract of service or apprenticeship (a more conventional employment engagement), and a person who undertakes to personally do or perform works or services for another person who is not their client or customer. The second is much wider, and may encompass any personal work engagement where it cannot be established that the individual is in business on their own account.
The recent amendment to the Jersey Employment Law to expressly ban exclusivity in zero hours contracts confirms that a zero hours contract in Jersey is a contract of employment.
The significance of the zero hours contact definition and exclusivity ban comes down to three key points:
- Without the statutory concept of a worker an employee engaged on a zero hours contract is entitled to the same statutory protections as any other employee. This includes rights to holiday and parental leave, and the ability to bring claims such as for unfair dismissal and redundancy pay.
- Depending on whether an individual is genuinely in business on their own account, an ostensible independent contractor arrangement may inadvertently be an employee engagement.
- Zero hours contracts may be far less useful to both parties than they appear. The policy behind the law is to tackle the exploitation of individuals who are engaged on non-guaranteed – and therefore more vulnerable – terms. But in introducing the provision, the government noted that there is ‘no evidence to suggest that exclusivity clauses in zero-hours contracts are causing an issue in Jersey’.
In practice, any business engaging an individual on a zero hours basis will have to accept that the individual is free to accept work elsewhere. If that is an unacceptable risk, the business may have to dispense with the zero hours requirement, and give some commitment as to the anticipated work that the individual will be required to perform.
For any business reviewing its consultancy and other contractor engagements, the new law is also a clear reminder that the risk of an individual being deemed an employee in Jersey can be high and goes beyond the written terms of engagement alone.”
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