Zero hours contract workers 



There is a widespread misconception that zero hours contract (ZHC) workers have no employment rights. Instead, the employment rights of these workers depend, as always, on whether they are an employee, a worker or self-employed, applying the tests described earlier in this Chapter. The problem for these workers is not the presence or otherwise of statutory employment rights, but rather the chronic imbalance of power in the relationship, which wholly undermines the value of any formal rights, at least for unorganised workers.


Among the many practical barriers to enforcement is the risk of employer retaliation, through the simple expedient of hours being “zeroed-down”, or future assignments being withheld. Tribunal fees out of proportion to the value of any potential claim are another obvious barrier (see Chapter 13).



In a typical ZHC arrangement, the written contract terms will state that the employer is not obliged to offer any work and the worker is not obliged to accept it. Hours are often explicitly described as “zero”, or “hours to be agreed”. The employer only agrees to pay for hours worked. Sometimes instead of no hours at all, the contract will offer, say, three hours a week. These are so called “short hours” contracts.



Most people with a ZHC are entitled to at least basic statutory “worker” rights. These include paid statutory holiday and the national minimum wage (see Chapter 4). They are also entitled to protection from discrimination. 



Even if the employer genuinely has no obligation to provide work and the individual has no obligation to accept it, once a shift is accepted in return for wages, a legal contract will be created for the duration of that shift (Drake v IPSOS Mori UK Limited [2012] UKSC 59). As long as the work must be performed personally (i.e. not through a substitute or a limited company), the individual concerned is likely to be a “worker” with the basic employment rights listed on page 34. Only the genuinely self-employed, in business on their own account, would not qualify for employment rights (Secretary of State for Justice v Windle and Arada [2016] EWCA Civ 459). 



Some rights, such as the right to statutory sick pay, depend on an individual earning above the Lower Earnings Limit (£113 for 2017-18) from a single employer. Some ZHC workers will not meet this threshold, especially if they have more than one job, as wages for multiple jobs are not aggregated together. For similar reasons, many ZHC workers will fail to qualify for pension auto-enrolment (see Chapter 4). 



Some ZHC workers may qualify as employees, entitling them to better rights (see page 34). Some employee rights require continuous service, but many important employment rights require no service, including most claims for automatically unfair dismissal, trade union-related rights and many significant parental rights (see Chapter 9). 



Where rights depend on continuous service, many ZHC employees are likely to struggle. However, as explained on pages 39 to 45, employment tribunals must look at the whole context, including the parties’ unequal bargaining relationship, to decide questions of employment status (Autoclenz v Belcher [2011] UKSC 41). Even if a written contract document describes the hours to be worked as “zero” or “casual as required”, if the worker can show a working pattern of regular hours over a long period, an employment tribunal may decide that their service has in reality been continuous. In practice, this kind of claim is difficult to prove. For an example of a successful claim, see the case of Pulse Healthcare Limited v Carewatch Care Services Limited & Others [2012] UKEAT 0123/12/2007. 



Sometimes the statutory rules on continuity of employment can help to bridge gaps in service for ZHC workers. These rules, found in sections 210 to 219, ERA 96, are summarised on page 381, Chapter 10. 



Another possible source of rights for some ZHC workers is the Part-time Workers Regulations 2000 (PTWR), summarised on page 53. The definition of a “part-time worker” under the regulations — “any worker whose hours are less than those of a full-time worker” — is wide enough to include ZHC workers and “short hours contract” workers. However, to succeed, claimants must be able to identify a real full-time comparator, not a hypothetical one (Carl v University of Sheffield [2009] UKEAT/0261/08/CEA).


Any term in a ZHC that bans a worker from working elsewhere without the employer’s consent (so called “exclusivity clauses”) is now banned (Small Business, Enterprise and Employment Act 2015). Only around one in 10 ZHC arrangements are “exclusive” in this way. Under the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015, in force since 11 January 2016: 



• any dismissal of a ZHC employee is automatically unfair, if the principal reason for dismissal is that they breached a contract term banning them from working for another employer. No qualifying service is required; and



• it is unlawful to submit a ZHC worker to a detriment if they work for another employer in breach of a contract term banning them from doing so. 



This change to the law was driven by the political need to be seen to act, but the scope for abuse is clear. In particular, there is a risk that some employers will escape unfair dismissal liability simply by withholding paid hours of work instead of formally dismissing the worker. Some commentators suggest that the regulations risk making a bad situation worse by normalising ZHCs as an acceptable method of work organisation and employment.


Non-statutory BIES guidance for employers on ZHC use includes examples of “inappropriate use” of ZHCs and “best practice”. It suggests that ZHCs “should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable”, and it encourages employers to use transparent contracts and policies. Since the guidance is non-statutory, employers are not legally obliged to follow it and employment tribunals are not required to take it into account. 



Office for National Statistics (ONS) figures show that the number of workers on zero hours contracts as their main job increased to over 900,000 during 2016. The true figure is likely to be higher, because many people are unsure of their contract terms. On average, ZHC workers work around 25 hours a week, according to the ONS. At least three in ten would rather work more hours. TUC research has shown that most earn less than the voluntary living wage (set by the Living Wage Foundation).


The TUC continues to call for much stronger legal protection of ZHC workers, including compensation where shifts are cancelled at short notice, written contracts with guaranteed hours, regular shifts and simplification of employment law (especially complicated rules on service continuity and employment status), so that all workers get the same basic employment rights.