What rights do individuals on zero hour contracts have?

Do those on zero hours contracts have any employment law rights and protections?

The answer is yes!

Are they entitled to maternity leave? Do they have to be paid the National Minimum Wage? Do they need to receive redundancy pay?

Unfortunately, the answer to these questions is not straightforward as an individual’s rights depend on whether they are an “employee” or a “worker”.

[infobox] Exclusive Bonus:Get The Definitive Employer’s Guide to Zero Hours Contracts to learn about the risks your business faces when using zero hours contracts. Download Now[/infobox]

If they are a worker, they are entitled to certain basic employment rights, such as the National Minimum Wage, annual leave, not to be discriminated against, not to suffer any unlawful deduction from wages and rest breaks.

If they are considered an employee, they are entitled to all the rights that workers have plus a wide range of other rights, including redundancy pay, maternity leave, the right to ask for flexible working and protection against unfair dismissal.

How do I know whether someone is a worker or employee? 

Determining someone’s employment status can be very difficult.

Recent cases has shown how a number of individuals have brought their claims to Employment Tribunals and courts and have successfully contested their employment status. In one of the most high-profile cases, the Court of Appeal ruled against Pimlico Plumbers, stating that their self-employed contractor was actually a worker and had the right to holiday pay, minimum wage and all the other rights that workers are entitled to. Employment status is a thorny issue; therefore we would highly urge you to seek legal advice at the earliest opportunity from our Employment Law Advisers.

In brief, there are a number of factors that need to be considered when determining someone’s employment status:

  • Level of control – How much say does the employer have over the individual?
  • Mutuality of obligations – Is there a duty to offer work and for the individual to carry it out?
  • Personal service – Can someone else step in if they can’t do the work?
  • Integration – Are they part of the organisation?
  • Financial risks – Is there a risk for the individual to lose money if things go wrong?
  • Equipment – Does the employer provide them with equipment?
  • Remuneration – How are they remunerated?

The way in which zero hours contracts work means that in most cases, the individual will be considered a “worker”. This is because there is no mutuality of obligations, which is key to an employment contract. The employer is under no obligation to offer the individual work and the individual is not obliged to accept the assignment

Simply stating that the individual is a worker is not enough. The HMRC and Employment Tribunals will look beyond the label used to describe the individual and the terms written down in the contract and look at the nature of the working relationship and how it have progressed over time.

Do they have the right to work for another employer?

The law bans the use of provisions in a Contract of Employment which restricts someone on a zero hours contract from undertaking work with another employer or bans them from taking work with another employer without the employer’s consent. If these provisions are found in the contract, they are unenforceable.

The law also provide redress. If they are an “employee”, they cannot be dismissed if the main reason for the dismissal is that they have violated a term in their contract that prevents them from working for someone else. If they bring a claim of unfair dismissal to an Employment Tribunal, they do not have to have worked for two years with their employer as is typically the norm for this type of claim. If they are a “worker”, they cannot be subjected to any detriment for not complying with the exclusivity provision in their contract.

[infobox] Exclusive Bonus:Get The Definitive Employer’s Guide to Zero Hours Contracts and get a complete understanding of how you can use zero hours contracts whilst remaining compliant with the law.Download Now[/infobox]

Director of Legal Services

James Tamm

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

Call us on 0345 226 8393.

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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