HM Insights

Zero hours = Zero rights?

The practice of engaging staff on so called ‘zero hours’ contracts is not new but the incidence of such contracts is believed to have risen sharply in the recent recession. They are now well and truly under the political and media spotlight, with Central Government committing to a review and Unite calling on the Scottish Government to ban offending employers from tendering for public work north of the border. These calls come amidst intense media interest, with employers being ‘named and shamed’ in the press for their use of such arrangements.

Zero hours contracts, as the name suggests, give no guarantee of a certain minimum number of hours. However, they come in different guises, and under some contracts, the individuals may be under no obligation to accept any work offered whilst others may be more ‘lop sided’ with the employee obliged to accept work if offered. There are certainly sectors where they may provide a common sense solution to peaks in demand which are unpredictable.

However, abuses of zero hours contracts can create legal and moral issues. It has recently been announced that, which reportedly has some 20,000 staff on zero hours contracts, is subject to a legal challenge in relation to the terms afforded to such staff. It is understood that the claim is proceeding under the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. According to the claimant’s solicitors, the company’s part time (zero hours) staff are denied paid annual leave, sick pay and bonuses which are available to their full timers.

So what rights do zero hours workers have? Despite the media, it is important for employers and for zero hours employees themselves to bear in mind that simply because they are on zero hours does not necessarily mean that they lack any employment rights. As the SportsDirect case highlights, zero hours staff may be able to point to full time comparators, and claim to be treated less favourably in their remuneration and benefits without justification. In addition, they may build up the qualifying service for unfair dismissal claims, and where they work on a regular basis on consistent hours, they may even be able to argue that a contractual right to these hours has come to exist through custom and practice. Another hotspot is holidays; - it is not possible to contract out of the statutory right to paid annual leave and employers wishing to avoid claims have to take steps to ensure that the zero hours employees are taking the minimum leave as well as the administrative burden of calculating their holiday pay which will be based on an ‘averaging’ formula.

Notwithstanding these potential protections, there is no doubt that zero hours contracts can be misused and can be unfair to the staff concerned. The TUC has pointed out there may be downsides for those employers too; staff who are unnecessarily placed on these sorts of precarious terms may be unlikely to be committed to their employer, possibly making them less productive.