Zero hour contracts can often have different meanings, but – in general terms, they are casual arrangements between the parties where there are no guaranteed working hours, no obligation on the business to provide any hours, and no obligation on part of a person to accept the hours offered. Arrangements such as these help to deal with a business’ fluctuating demands.
Under Section 27A of the Employment Rights Act 1996, zero hour contracts cannot include an exclusivity clause that restricts the individual working elsewhere. Individuals working on a zero hour contract can either be workers or employees depending on the factual circumstances of the case. For example, when an organisation is obligated to provide work for people to perform personally – and the organisation can control the manner in which the work is performed, then it’s likely that the individual is classified as an employee rather than a worker.
Where there is no mutuality of obligation – such as where there is no obligation to provide work and no obligation to accept the work, but the individual still accepts the work and is required to perform it personally, it is likely the individual would be regarded as a worker. This was the case in Nursing and Midwifery Council v Mr R Somerville 2021.
The Risk for Employers
If employers get the status of individuals wrong – such as if they are under a zero hour contract and are perceived as a worker when, on the facts, they are an employee, then the employer may be subject to substantial damages claim for breaching their employee rights.
How do Employee and Worker Rights Differ?
Where zero hour contracts suggest the individual is a worker, they receive limited employment rights compared to those outlined as employees:
- Workers do not get statutory notice on termination of their employment.
- Workers do not receive statutory maternity, paternity or adoption leave and pay as they are not obligated to make themselves available for work, and can choose to take time off when they want to.
- Workers do not get statutory sick pay unless they can meet the eligibility criteria for such pay entitlements.
- Workers do not have the right to request flexible working arrangements or to request any unpaid time off to care for dependants.
- Workers do not have the right to any time off for antenatal care or trade union activities.
It’s worth noting that – while TUPE rights do not automatically apply to workers, a first instance Employment Tribunal (ET) decision in the case of Dewhurst v Revisecatch Ltd t/a Ecourier 2019 suggested that TUPE could apply to workers in certain circumstances. TUPE defines employees as individuals working under a contract of service, apprenticeship scheme, or otherwise. In this case, otherwise was interpreted by the tribunal as extending to workers. This decision does not bind other tribunals but may be persuasive in their judgement. Furthermore, the ACAS Code of Practice on Disciplinary/ Grievance Procedures suggests the code only applies to employees.
Employees get all the above rights in addition to several others. This includes a protection from unfair dismissal after two years of continuous service – unless the dismissal relates to a breach of statutory rights or breach of protected characteristics under the Equality Act 2010.
Zero Hour Worker Protections
A worker – in line with employee rights, also receives protection from unlawful deduction of their pay, discrimination rights, health and safety rights, and some protections as a pregnant worker. They also receive minimum wage rights, whistleblowing protection, the right to be accompanied at disciplinary and grievance procedures, and rights within the Working Time Regulations – such as holiday rights.
On top of this, workers receive the rights to itemised payslips, data protection rights, and rights under the Part Time Workers (Prevention of Less Favourable Treatment) Regulations. Subject to eligibility requirements, they also get the right to be auto-enrolled in a pension scheme, and – as of April 2020, must also receive a written statement of employment particulars on their first day of working for an organisation.
Furthermore, a new statutory right to request a predictable working pattern is due to come into force towards the end of 2024. This will permit workers to apply for a change to their terms and conditions in order to obtain a more predictable working pattern.
This article is for general information purposes only and does not cover agency workers. Should you require any assistance with meeting your obligations, please do not hesitate to contact the HR and Legal Advice Line Service for FREE on 01455 852 028.
