Employment contracts – including Zero Hours contracts
By way of background it would be useful to look at the types of contract there can be between a business and the people who work for them.
DIFFERING TYPES OF CONTRACTS
- Contract of Employment – Employee
This gives the full rights that legislation and regulation can provide. Once two years’ service has been completed all the unfair dismissal and statutory redundancy rights arise. There are pension rights, rights to notice periods, minimum holidays, flexible working rights, maternity and many others.
- Self Employed – Independent Contractor
This is a contract for services and conveys no employee rights. Often despite written contracts confirming the self-employed status the person providing the services can be classed as employee.
- Workers Contracts
This is something of a legislative development that falls between a full blown contract of employment and self-employment status.
If somebody has worker status they are entitled to some employee rights that include the following: –
- minimum holidays/rest breaks
- payment of at least the minimum wage
- a right not to be discriminated against
- the 48-hour time limit unless contracted out
- tax dealt with on a PAYE basis
- Zero Hours Contract
This can provide flexibility for both the business and the worker, despite its demonization by many politicians including the good Mr Corbyn.
The sort of companies that use it to good effect are those who have a need for supply of regular employees who might be part time and are able to be flexible and suitable for rostering.
A good example of this is McDonalds who seem to operate a sensible system that has the approval most of its employees
what is in the contract and what makes it different and controversial.
I have a specimen contract with me and have just highlighted a few details that should give you a flavour of the nature of this contract.
- It is not a contract of employment
- It is entirely at the company’s discretion as to what work is offered.
- There is no presumption of continuity of employment so long as the notice periods apply.
- No obligation on the employee to accept work offered
- There will be a clause that sets out how the work is to be rostered and how the employees are to be engaged in work the notification that has to be given.
- Hours of work – this will include an entitlement to a lunch break where the worker is required to work more than six hours in any day.
- The option to opt out of the restricted 48-hour week
- Pay – this confirms pay only for the hours worked
- Holidays – this provides on a pro rata basis when necessary the 28 days entitlement might have provision for bank holidays.
- Termination – there is no statutory minimum or contractual minimum of either party
- the worker just has to inform the company and the company will remove the worker from the list after a failure to take up any assignments for any period of time.
- UBER CASE
This was actually not a case that started out as a zero hours contract dispute.
Uber considered all of its drivers to be self-employed and indeed this did suit many of them
The court found that they were workers and as such they had worker rights,the very ones I have talked about in relation to the zero hours contract.
Most importantly for Uber, which is why they are appealing, is they have to give paid holidays
in addition they have to deal with their money on as PAYE basis which obviously altered the administrative set up there.
- A general warning but with regard to all types of contract be they self-employed, full time employed or worker that is that the court are entitled to look at the actual situation and not what the contract is called.
- They can convert into employment contracts either self-employed arrangements or worker contracts .
- These can have the effect of imposing on the employer all of an employer’s obligations under current legislation.
- My sales pitch is simple. advice and drafting of all of the contracts I have referred to can be dealt with by us.
- Or i can deal with any problems that any employer might have with its current work force arising from this.