Condemned by the press as draconian and employer-biased, zero-hours contracts (ZHCs) offer no guarantee of work and may prevent the worker from working elsewhere. Rumour has it they offer no right to paid holiday or sick pay either.
Unpopularity with workers has not put employers off using ZHCs. Vast numbers remain keen to take advantage of the flexibility they offer, particularly in the retail, catering and care sectors. Statistics show that 200,000 workers in the UK have ZHCs contracts; a conservative estimate, say some experts, who put the figure closer to half a million.
Workers are rebelling against ZHCs. Last week, a legal challenge was launched against Sports Direct claiming that using ZHCs for its 20,000 part-time workers is discriminatory. Workers may ‘vote with their feet’ too. Remember last year’s Olympics when droves of security guards recruited on ZHCs left their employer in the lurch with £60m losses just before the Games began?
Many staff offered ZHCs are part-time workers, often women. Employers should be wary of taking any advantage too far. Trade Unions argue that the use of ZHCs winds the clock back to ‘the bad old days of people standing at factory gates waiting to be picked for a day’s work’. A situation riddled with favouritism and economic instability. But ZHCs do come with employment responsibilities despite media hype to the contrary.
Any worker with a ZHC can bring a claim that they are an employee and not a casual worker. Employee status attracts the ‘gold star’ employment rights to claim unfair dismissal, statutory redundancy payments and more. Regular shifts worked over a sufficient length of time may be enough to convince a tribunal that the worker is a qualifying employee.
It may come as a surprise to some employers to learn that, contrary to recent comments in the press, workers (and employees) on ZHCs are entitled to both holiday pay and sick pay from day one. Calculation difficulties can be overcome by careful provision in the contract. This will avoid a claim for a lump sum in lieu of holiday pay at the end of the relationship. Statutory sick pay is available to workers reaching the qualifying earnings threshold where they accept an assignment but later cannot work due to illness.
Employers choosing to use ZHCs should be alive to the potential pitfalls of this far from risk-free option; a well-drafted contract must be the starting point. It remains to be seen whether Sports Direct lose the case against them and the effect this will have on the future use of ZHCs. Meanwhile Vince Cable, Business Secretary, is considering legislation to regulate them but so far has ruled out banning them altogether.
Victoria Notman is a solicitor at Raworths LLP specialising in employment. To contact Raworths telephone 01423 566666 or visit our offices at Eton House, 89 Station Parade, Harrogate, HG1 1HF. Alternatively, you can email firstname.lastname@example.org