Category Archives: Zero hours

Worker-Employee, what’s the difference?

Good question, you may say, since October 2016 the government has been carrying out an enquiry into whether the terms “Employee” and “Worker” are properly defined legally. Currently there are three possible categories; “employee”, “worker” and “self-employed/freelance”

“Workers” are entitled to certain employment rights, including, getting the National Minimum Wage protection against unlawful deductions from wages, the statutory minimum level of paid holiday, the statutory minimum length of rest breaks,  to not work more than 48 hours on average per week or to opt out of this right if they choose, protection against unlawful discrimination, protection for ‘Whistleblowing’  and to not be treated less favourably if they work part-time.

“Employees” have all the rights workers have plus the following; Statutory Sick Pay, statutory maternity, paternity, adoption and shared parental leave and pay (workers only get pay, not leave) minimum notice periods if their employment will be ending, protection against unfair dismissal the right to request flexible working , time off for emergencies and Statutory Redundancy Pay.

“Freelance or casual”, have none of the above rights as they are deemed to be “self-employed” and are only covered for general statutory duty of care, for their health and safety and, in some cases, protection against discrimination. Any rights and responsibilities are set out by the terms of whatever contract they can negotiate with their client.

Evidence put before the enquiry, however, suggests that two categories would improve the situation, “employed” and “unemployed”. “Employed” would mean that all workers have the same rights as employees to make things as simple as possible for businesses since tribunal and court judgments so far have not always managed to explain the differences clearly. This often creates situations where businesses look to minimise their legal obligations by trying to structure their relationships slotting people into the least burdensome category, like in the recent Uber case; what might start out as a clear self-employment relationship, in practice can turn into something quite different once the law gets involved.

We’ll have to wait and see what comes of all this but meanwhile if you need any help or advice on this or any other legal topic, give us a call.

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Filed under Arbitration, contract law, Dispute resolution, Employment Law, HR Issues, Mediation, UK Law, Unfair Dismissal, Whistelblowing, Zero hours

Zero Hours Contracts-Update

Further to our previous blogs on zero hours contracts here’s an update on the current legal situation and what is considered best practice. Anyone and everyone on a zero hours contract is entitled to statutory employment rights without exception. Consequently a zero hours employee will benefit from the employment rights normally associated with a full time employee doing the same job, so a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination.

The following are all examples of when a zero hours contract might be considered appropriate, but it should be noted these are not the only circumstances and there are also other employment choices available to employers in these situations.

New businesses- Before a business builds up a big enough customer base, it may be necessary to employ people on zero hours contracts to cope with unpredictable demands.

Seasonal work- During periods of peaks in demand, where the employer knows that for short periods of time additional workers are needed.

Unexpected sickness- in such cases employers may be able to call on experienced staff at short notice, like a pharmacist, or a lifeguard.

Special events-Venues such as restaurants or bars may need to be able to call on trained and experienced staff to cover events such as weddings or functions.

In circumstances where the employee ends up working regular hours over a long, continuous period of time, in such cases, the employer should consider offering a permanent part time contract or a fixed term contract. All contracts should be clear and transparent so the individual can understand their rights and what the implications of such a contract means to them. Cancelling work at late notice, or when the individual turns up at the place of work, is now unacceptable unless truly unavoidable. Employers should consider putting into place a written policy that explains when and how work might be cancelled, what measures are taken to avoid this and if the worker can expect any compensation for any costs they may have incurred. When recruiting for a zero hours contract, the job should be clearly advertised as such and the fact made clear that hours are not guaranteed, but based on demand.

The Small Business, Enterprise and Employment Act now prohibits the use of exclusivity clauses or terms in any zero hours contract; which means an employer cannot stop an individual from looking for work or accepting work from another employer. The employer must allow the individual to take work elsewhere in order to earn an income if they themselves do not offer sufficient hours. Workers are no longer bound by any exclusivity clause in a Zero hours contract; they can just ignore it; nor can an employer attempt to circumvent the exclusivity ban by stipulating that the worker must ask their permission to look for, or accept work, anywhere else.

If you are adversely affected by zero hours contracts, employer or employee, give us a call.

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Filed under contract law, Dispute resolution, Employment Law, HR Issues, UK Law, Zero hours

Zero Hours Contracts: Avoiding the ban on Exclusivity clauses

Here’s another update in our coverage of Zero Hours Contracts. In June of this year the Government announced that it would be taking forward proposals to ban the use of exclusivity clauses in zero hours contracts. As we all know, ZHCs do not guarantee any hours and an exclusivity clause in a ZHC means the employer can prevent the worker from working for someone else. The Government is now looking for views on how to stop employers potentially avoiding such a ban.

To that end the Government is adding two new sections (27A and 27B) into the Employment Rights Act 1996 using the Small Business, Enterprise and Employment Bill 2014, currently before Parliament, which will have the net effect of making exclusivity clauses in ZHCs unenforceable. Section 27B will allow the Secretary of State to make further regulations dealing with anti-avoidance issues.

The Government has subsequently launched a consultation as to how the powers in section 27B should be used, to determine the best mechanism for tackling avoidance of the exclusivity clauses ban in ZHCs.and to obtain any redress for the worker. Currently it’s simple for an employer to avoid an exclusivity ban by offering a contract that guarantees just one hour of work.

The consultation ultimately envisages the creation of industry-led and industry sector owned codes of practice on the fair use of ZHCs. While it will be up to unions and employer representatives to agree the content of such codes, the consultation suggests that the issues to cover could include:

  • When it is appropriate/not appropriate to use a ZHC.
  • Whether and how to promote clarity, e.g. job adverts and contracts stating the type of contract up front.
  • The rights and responsibilities of the worker and the employer and how to calculate accrued benefits such as annual leave where appropriate.
  • Best practice in allocating work.
  • Recommended practice around notice of hours of work or cancellation of work.

The consultation runs until 3 November 2014.

If you are affected by Zero Hours Contracts either as an employer or employee, why not give us a call

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Filed under Employment Law, HR Issues, Legal news, UK Law, Zero hours

Changes to Employment Law are on the way.

The Small Business, Enterprise and Employment Bill 2014 had its second reading on 16th July 2014 so it may be useful to have a look at some of the employment law provisions. The Bill, in the main, is designed to reduce regulatory burdens and facilitate the inception, financing and growth of business.

Within the Bill there will apparently be a framework that would require specific individuals within a company to produce an annual report on the disclosures they receive from workers under current whistle-blowing legislation.

The legislation will introduce a new system for enforcing employment tribunal awards and ACAS conciliated settlements. An enforcement officer will give a 28-day warning notice if a tribunal award remains unpaid by a respondent and if payment is not made in that period, a penalty notice will be issued, forcing the respondent to pay an additional 50% of the outstanding amount, to the Secretary of State, not to the claimant Penalties will be a minimum of £100 and a maximum of £5,000. If the full sum and the penalty are paid within 14 days, the penalty itself will be reduced by 50%

Employment tribunal rules of procedure could be amended to limit the number of applications for postponement available to either party and the tribunal may be obliged to consider making a costs order if the postponement application is late.

Zero Hours contracts will be more clearly defined and the legislation will render unenforceable, any clause in such a contract which prohibits the worker from working for someone else, or which prohibits them from doing so without the employer’s consent.

The Bill is expected to be finalised by November 2014 so if you have any questions or need advice, don’t forget to give us a call.

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The Latest on Zero Hours Contracts

The Government held a public consultation on Zero Hours Contracts and has recently responded to said consultation.

In reply the government has stated that it will ban the use of exclusivity clauses in Zero Hours Contracts and increase the availability of information on Zero Hours Contracts for employees. It further announced it will work with trade unions and business to develop a best practice code of conduct aimed at employers who wish to use Zero Hours Contracts for any of their workforce.

Exclusivity clauses prevent an individual from working for another employer, even when no work can be guaranteed by the current employer, theyby preventing them from taking temporay work elsewhere to “fill the gap”.

The ban on exclusivity clauses will form part of the Small Business, Enterprise and Employment Bill which has just been introduced to Parliament. This bill will allow employees on Zero Hours Contracts to have the freedom to find work with more than one employer in order to boost their income.

The Government estimates that 125,000 Zero Hours Contracts workers are currently tied to an exclusivity clause and it states that 83% of the responses to the consultation were in favour of the ban.

The Government will also:

  • Issue a further consultation on how to prevent rogue employers evading the exclusivity ban, for example through offering one hour fixed contracts.
  • Work with business representatives and unions to develop a code of practice on the fair use of Zero Hours Contracts by the end of 2014.
  • Work with stakeholders to review existing guidance and improve information available to employees and employers on using Zero Hours Contracts.

The Government received over 36,000 responses to its consultation on Zero Hours Contracts. If you are an employer or employee affected by Zero Hours Contracts, give us a call.

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Filed under Commercial law, Employment Law, HR Issues, UK Law, Zero hours

Are you flexible enough?

Flexible working is a way of working that suits an employee’s needs, for example by having flexible start and finish times, or working from home. From 30th June 2014, all employees now have the legal right to request flexible working, which is no longer restricted just to parents and carers. Employees must have worked for the same employer for at least 26 weeks to be eligible and this is known as ‘making a statutory application’. Employers have a duty to consider all requests in a ‘reasonable manner’, although they will still have the right to refuse on business grounds. A ‘reasonable manner’ can be interpreted in several ways but should always include provision for:

  • Making a fair assessment of the advantages and disadvantages of the application.
  • Holding a meeting with the employee to discuss the request.
  • Creating and offering an appeal process.

Employers can reject an application for any of the following reasons; if the statutory application:

  • will create extra costs which will damage the business.
  • the business is planning changes to the workforce at the time the aplication is made.
  • means the work can’t be reorganised among other staff.
  • means the business won’t be able to meet customer demand or sufficient people cannot be recruited to do the work.
  • will have an effect on quality and performance or if there’s a lack of work to be during the proposed times.

Nevertheless, the reason for rejecting an application should be sound, because if an employer doesn’t handle a request in a ‘reasonable manner’, the employee can take them to an employment tribunal. If you are an employer or employee and are concerned by any of the issues involved with flexible working, why not give us a call?  

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Filed under Employment Law, HR Issues, Parental leave, UK Law, Zero hours

Time for a holiday?

It’s time to take a break. You’ve been looking forward to a holiday since Christmas and now you can jet off to lands far and wide and soak up the atmosphere and recharge your batteries. Don’t forget to put your “out-of-office” message on make sure you have your passports ready and suitcases packed.

Just before you go, either as an employer or an employee do you fully understand employee’s rights when it comes to their annual leave? There is a lot of information on this topic and it can be very confusing and recently there have been some high profile cases that involved employees’ statutory holiday entitlement.

We know you are in a hurry to be off so we won’t bore you with a lot of jargon but here are a few pointers so you know your rights and responsibilities as an employer and employee.

The Working Time Regulations 1998 (WTR) form the basis of your right to annual leave. These state that a full time employee is entitled to 5.6 weeks’ annual leave (28 days) in each leave year. This is made up of a minimum of four weeks’ annual leave (20 days) each year based on an EU directive; and the UK right to 1.6 weeks’ annual leave (8 days) each year which represent the number of bank holidays in a year in England & Wales. A part-time worker is entitled to 28 days’ holiday reduced pro rata, according to the number of days/hours they work each week. An employee is entitled to the right to holiday leave from their very first day of employment; no minimum service is required.

What if you want to carry over holiday from one year to another? The WTR states that the minimum four weeks’ leave entitlement must be taken in the leave year to which it relates, or else it is lost, basically, “Use it or lose it!” The “additional” 1.6 weeks’ leave may be carried forward into the next leave year only if it has been contractually agreed between employee and employer, otherwise it is not allowed. However, some employers offer their employees an enhanced holiday entitlement, over and above the minimum stated in the WTR and the carry-over of such contractual holiday is permitted by law. As an employer therefore, you should decide whether or not you want to allow this and ensure your contracts are clear on this point.

What happens to annual leave when an employee is prevented from taking it due to periods of sick leave, maternity leave or other family-related leave? There have been lots of cases on this point recently and in certain respects the decisions in these cases are out of step with the wording under the WTR. It appears that employees who have been absent from work due to maternity, paternity, adoption or long-term sickness absence, can carry over unused statutory holiday (this includes the basic four-weeks and the additional 1.6 weeks entitlement) into the next leave year. This means holiday entitlement can roll over automatically in these circumstances. It is not 100% clear how many holiday years unused holidays can roll over for, indications are possibly up to 2 – 3 holiday years, but this is still a grey area and you should seek legal advice.

Holidays are a complex area, but you should always ensure your business is compliant with the law. So what can you do?

Review how your employees are actually paid for holidays:

  • Review how your employees should be paid- should you be paying your employees holiday pay that includes any payments for overtime, commission or bonuses?
  • Review your contracts of employment; is the holiday entitlement clause correct? Are there provisions to deal with employees’ entitlement to carry over holiday? Are there any provisions to deal with holidays in instances such as sick leave, maternity, paternity or adoption?
  • Check your employee handbook and/or holiday polices for accuracy; are these policies up-to-date?

Most importantly, check that your payroll department are paying your employees their correct holiday entitlements and if not, correct this position immediately otherwise you run the risk of employee claims at an Employment Tribunal for unpaid holiday, which could go right back to 1998, when the WTR were implemented.

As always if you are concerned about any of these issues, give us a call, enjoy your holiday!

 

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Filed under Commercial law, Duty of care, Employment Law, EU Law, HR Issues, Parental leave, UK Law, Zero hours