Zero- Hours Contracts in South Africa: Is there a need for Legislative Intervention

Abstract

The South African law of contract is centred on the principles of freedom of contract and good faith. These principles mean that parties are free to choose what terms to contract on and with whom to contract with, provided that the result is not contrary to public policy. Consequently, the resulting contract is likely to be more favourable to the party in a higher bargaining position. It is noted that there is no general rule providing that contracts must be fair. Considering this, zero-hours contracts freely entered into, which are not against public policy, are valid in South Africa, even if they are unfair. According to research conducted by the CIPD, zero-hours contracts can benefit both parties if they are well regulated. The CIPD research also suggests that the contracts are often only advantageous to employees whose circumstances do not allow them to be engaged in full-time employment. This paper explores the need for the legislature to intervene in regulating zero- hours contracts. It emphasizes the need for the legislature to limit the unfettered exercise of bargaining power in zero-hours contracts to provide for the balancing of employee and employer rights. South Africa’s current legal framework does not specifically regulate the use of zero-hours contracts. In the absence of such regulation, vulnerable employees find themselves at the mercy of unscrupulous employers who exploit the weaknesses in the legal system for their own gain. The effect, thereof, being the blatant disregard of statutory obligations, Constitutional rights and values, and an unfettered exercise of power. The paper further explores the regulation of zero-hours contracts in jurisdictions such as the United Kingdom and New Zealand which have legislation specifically dealing with these contracts and recommends that South Africa should follow suit. It also recommends, inter alia, that the Labour Relations Act be amended to specifically deal with zero-hours contracts, that the use of exclusivity clauses be reserved for specific circumstances, and the amendment of the Basic Conditions of Employment Act to provide for minimum working hours. It concludes that there is a need for the legislature to intervene in regulating zero-hours contracts to ensure the protection of vulnerable employees from exploitation; the fair balancing of employee and employer rights; the advancement of Constitutional values of Ubuntu, fairness, and dignity; and the prevention of abuse of power by parties in strong bargaining positions