What are zero-hour contracts, and can casual workers ever become employees?

With the introduction of the Agency Workers Regulations in 2010, many Companies are believed to be using far more zero-hour contract workers now, instead of Agency temps. At Workline we get a lot of queries from people employed on zero-hour contracts, so in our article here we look at these types of contracts in more detail.

What are zero-hour contracts?

  • They are contracts that give businesses a high degree of flexibility as they give no guarantee to the individual worker of a minimum number of working hours, so the individual worker can be used as and when required, and is only paid for the hours they work.
  • The worker will not obtain ‘employee’ status generally, and will not build up any continuity of service (if the contract is appropriately written and accurately reflects the relationship between the employer and the worker).
  • The worker should not be required to undertake any work that is offered and there should be no detriment to them if they decline work or work for another company. Otherwise this would indicate they have employee status, it is called ‘mutuality of obligation . ‘Mutuality of obligation’ is a key requirement for a contract of employment – where the employer is obliged to offer and pay for work and the employee is obliged to accept and perform the work. Exclusivity Clauses (where a worker is not ‘allowed’ to work for another Employer) should not exist and on the 26th June 2014 the Government announced they would ban these clauses. More details are below on this progress.
  • For a zero-hour contract to be legitimate there must not be any mutuality of obligation between assignments given to and accepted by the worker (and this means that holiday entitlement should not accrue between assignments, only during the period of an assignment).

In early April 2018 the Welsh Government introduced new requirements for Employers of care staff who look after people in their own homes.  Employers will need to now:

  • Give care workers, who are employed on a zero-hours contract, a choice of contract after 3 months – they can choose to continue on a zero-hours contract of make alternative contractual arrangements
  • Ensure that time allocated for travel is separate to caring so that ‘call-clipping’ (shortening of care sessions) does not happen.

In addition, a register of domiciliary care workers will be set up (inside the existing Social Care Wales’ workforce register).

Can a worker on a zero hours contract be an agency worker?

An unusual question, as usually the question would be am I an employee or a worker.  In Brooknight Guarding Limited v Matei, in September 2018, Mr Matei argued that he was an agency worker and so entitled to the same basic employment rights as permanent employees working at at his employer’s client, where he provided his services.  Matei was employed by Brooknight, who offer security services, as a ‘cover’ security guard, providing services to Brooknights clients, on a zero-hours contract. He was required to work at any site Brooknight sent him to, but he spent the majority of his working time for their client Mitie at a Citi Group site in London.  He worked for Brooknight for 21 months before being dismissed. Matei’s claim was that as an agency worker, after 12 weeks he was entitled to the same employment conditions as if had been employed by the client. The Employment Tribunal found in his favour and said that Brooknight was acting as a temporary work agency (within the meaning of the Agency Workers Regulations) as it engaged in the economic activity of supplying Matei to work temporarily for and under the supervision of and direction of Mitie/Citi Group.  Brooknight appealed but the EAT agreed with the Tribunal. This successful claim meant that Mr Matei could claim additional remuneration (as he should have received equal pay, hours and holiday as a permanent worker at Mitie/Citi Group after 12 weeks). The key to this decision was that he was a ‘cover’ worker, so his placements were temporary – if a person was supplied on an indefinite or permanent basis, they would not meet the definition of an agency worker.

This judgement is important to any employer who supplies workers to clients, or employers who hire workers from other companies who specialise in supplying workers – if workers are being supplied on a temporary basis to a client, there is a risk they may be agency workers, and therefore after 12 weeks of working with the client in the same role, they may acquire the employment conditions of the clients permanent employees.

 

 

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