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 at the beginning of this Chapter. The problem for these workers is not the presence or otherwise of statutory employment rights, but rather the chronic imbalance of power between the two sides, 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 — 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 has no obligation to provide work and the individual has no obligation to accept it, as soon as a shift or assignment is accepted in return for wages, a legal contract is created for the duration of the shift. As long as the work must be performed personally (i.e. not through a substitute or a limited company) the individual concerned will be a “worker” with the basic employment rights listed at the beginning of this Chapter.


Some rights, such as the right to statutory maternity pay or statutory sick pay, depend on the worker earning above the Lower Earnings Limit (£112 for 2016-17) from a single employer. Some ZHC workers will not meet this threshold, especially if they have more than one job, as the 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 of these 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 in Chapter 3, employment tribunals must look at the whole context, including the parties’ unequal bargaining relationship, to decide what contract terms have been agreed (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 349, Chapter 10. 


Another possible source of rights for some ZHC workers is the Part-time Workers Regulations 2000 (PTWR), summarised below. 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 under the Small Business, Enterprise and Employment Act 2015. In practice only a small minority (roughly one in 10) of 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 s/he breached a contract term banning work 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. 


In reality, the scope for abuse of this new law is clear. Employers can potentially escape unfair dismissal liability under these new regulations simply by withholding paid hours of work instead of formally dismissing the worker. Some commentators suggest that the new regulations may even make a bad situation worse by normalising ZHCs as an acceptable method of work organisation and employment. New non-statutory BIS guidance for employers on ZHC use, published in October 2015, 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 encourages employers to be use transparent contracts and policies. Since this guidance is non-statutory, employers are not legally obliged to follow it and employment tribunals are not required to take it into account. 


The number of ZHCs in the economy increased by 15% in 2015-16 and 801,000 workers are now employed on this basis.


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