Zero-hours contracts


Bath PublishingBath Publishing have recently published the 2018/19 edition of the Employment Tribunal Remedies Handbook (General editor Benjamin Gray of Littleton Chambers) so we thought it would be useful to include one of the entries on Zero hours contracts to give you a flavour of what the book contains. We are offering all readers 10% off the usual price of £45. You can buy your copy from bathpublishing.com/employment – make sure you enter the discount code DB301610 when prompted.

A zero-hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept or decline the work offered on that occasion. Individuals on a zero-hours contract may have the employment status of a ’worker’ or an ‘employee’.

The term is a political rather than a legal concept, potentially covering a range of different contracts and working arrangements.

Regardless of how many hours are actually offered, the employer must pay at least the National Minimum Wage.

Section 27A(3) of the ERA 1996 (as inserted by the Small Business, Enterprise and Employment Act, s153(1) and (2)) provides that, from 26 May 2015, a provision in a zero hours contract which prohibits the worker from doing work under any other arrangement is unenforceable.

Regulation 2 of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015) (ETZHC (R) Regs 2015) makes provision in relation to the right for individuals on a zero hours contract not to be unfairly dismissed or subjected to a detriment (see Detriment) for a reason relating to a breach of a provision of a zero hours contract to which s27A(3) of the 1996 Act applies.

There is no qualifying period for an employee bringing such an unfair dismissal or detriment claim to the ET.

Remedy

Where an employment tribunal finds that a complaint is well founded, it must take such of the following steps as it considers just and equitable:

  • making a declaration as to the rights of the complainant and the employer in relation to the matters to which the complaint relates; and
  • ordering the employer to pay compensation to the complainant (Reg 4(1) ETZHC (R) Regs 2015).

The amount of the compensation awarded must be such as the tribunal considers just and equitable in all the circumstances having regard to:

  • the infringement to which the complaint relates; and
  • any loss which is attributable to the act, or failure to act, which infringed the complainant’s right (Reg4(2) ETZHC (R) Regs 2015).

The loss must be taken to include:

  • any expenses reasonably incurred by the complainant in consequence of the act, or failure to act, to which the complaint relates; and
  • loss of any benefit which the complainant might reasonably be expected to have had but for that act or failure to act (Reg 4(3) ETZHC (R) Regs 2015).

Gross or net: The basic award will be calculated gross and the compensatory award will be calculated on the basis of net loss.

Limit on a week’s pay: £508 for the basic award element.

Any maximum or minimum: If the detriment to which the worker is subjected is the termination of the worker’s contract, but that contract is not a contract of employment, the total award will not exceed the aggregate of the maximum basic award (£15,240) and the maximum compensatory award (£83,682) i.e. £98,922 (Reg 4(6) ETZHC (R) Regs 2015).

Adjustments: The award can be reduced for contributory fault (Reg 4(7) ETZHC (R) Regs 2015).

Mitigation: The individual is expected to mitigate their loss (Reg 4(4) ETZHC (R) Regs 2015).

Tax: If the combined sum of any basic and compensatory award is greater than £30,000 then the excess figure will be subject to tax (see Grossing up).

Recoupment: It is assumed that recoupment will be apply to immediate loss of earnings.

Statutory authorities: Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 Regs 2,3 and 4; Small Business, Enterprise and Employment Act 2015 s153; ERA 1996 s27A.

Take a look at our other products and services, including an online resource which will calculate schedules of loss without the pain, at bathpublishing.com/employment.

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