There has been much ado recently about zero hours’ contracts. So much so that a zero hours’ contract bill is currently passing through parliament.
The purpose of the bill is to limit the use of zero hours’ contracts and it had its first reading on 2nd July 2014 and the second reading has been postponed until 27th February 2015. This bill is an attempt to remedy the current mischiefs. Employers that offer zero hours’ contracts have to treat workers the same as employees with fixed regular working hours. They are also required to give reasonable notice on when they are needed as well as notice in writing of the minimum hours their workers are required.
Other current practices that are to be stamped out include:
- Considering zero hours’ contract workers for regular working hours every 12 weeks
- If they have worked continuously for that period of time the employer should have a duty to offer the worker fixed and regular working hours
- It will also be unlawful to subject zero hours’contract workers to detriment
- The dismissal of a zero hours’ contract worker who refuses to work at the employer’s request will constitute an unfair dismissal
- A zero hours’ contract worker is also regarded as being employed when he or she works or does not work for that employer
So what is the current landscape?
The term ‘zero hours’ is not currently defined in legislation. However it’s generally understood to be a contract between an employer and an individual worker under the terms of which:
- The employer is not obliged to provide the worker with any work at all, nor any minimum working hours and
- (usually) the worker is not obliged to accept any of the hours offered.
This absence of mutuality of obligation is a key aspect of zero hours’ contracts; the lack of mutuality of obligation means that in most cases the individual would have a status of worker for employment protection purposes and will not be an employee.
It’s worth noting that zero hours’ contracts may not actually be called a zero hours’ contract but could be offered as “casual work” contracts or “as required or needed” or “flexible work”. The importance of employment status is discussed in a previous article (read Employment Status: Briefing and Are you a Worker or a Self-Employed person?). In short there are certain rights that are only conferred on employees and not on workers or self-employed individuals. This means that individuals working on zero hours’ contracts do not have the same protection under employment legislation as employees have. Calling an arrangement a zero hours’ arrangement and issuing a contract labelling it as such is not conclusive. An Employment Tribunal will ascertain all the terms of the contract as well as what actually happened in practice between the parties to analyse whether the individual is an employee. It is the substance not the form of the agreement.
Zero hour contracts and your rights
Zero hours’ contracts usually fall within the definition of workers, which means that they do have some employment rights. These include, for instance, the right to be paid the national minimum wage, working hours and rest breaks, entitlement to paid holiday, part-time working and pension auto-enrolment. However it is not certain that an individual on a zero hours’ contract will fall within this definition. It will ultimately depend on the facts of the case and how the relationship operates. This will determine where they fall on the scale between genuinely self-employed and employee status.
With regard to continuity of service, for individuals that are working on back-to-back fixed term contracts or zero hours’ contracts, there may be grounds to establish the existence of a continuing contract. This overarching or “umbrella contract” must still have some level of mutual obligation between the employer and the individual during the period when no work is being performed. There will not be sufficient mutual obligation if the conduct of the parties is wholly explained by mutual convenience and goodwill, and it is not necessary to infer contracts when there is no justification for inferring one. However the expectation between the parties may give rise to sufficient mutuality of obligation to establish a continuing contract.
Why have zero hours’ contracts?
The purpose of zero hours’ contracts is to allow a flexible workforce, which is necessary for employers who frequently need a change of staff as the workload fluctuates. The employer’s benefit in this case would be a pool of staff on demand, no ongoing requirement to provide guaranteed levels of staff and a cheaper alternative to agency fees. The employee’s benefits would be flexible working hours, no ongoing requirement to accept offers to work, no consequences for not working requested hours and gaining employment experience and skills whilst actually working.
So how does this work in practice? I had the opportunity to speak to a student who works on a zero hours’ contract in a retail store. In order to protect her identity this interview has therefore been anonymised. Any likeness to real events, persons or companies is coincidental.
Zero Hours’ Contract Interview
Press the arrow to the right hand side of each question to reveal the answer.
Q: How long have you been working under a zero hours’ contract?
Since November 2013.
Q: Under a zero hours' contract you are not obliged to accept work that is offered to you when you are asked to do it. Have you ever refused work and what was the response?
You are obligated to work when they schedule your hours and if you are unable to work then you have to go on to a Facebook page and try and get someone to cover it. If someone doesn’t cover it then you can get a UPN, which is some sort of punishment. If you get three UPNs you get dismissed.
So there were two times recently when I asked not to work. Over Christmas I was scheduled for a six hour shift and I was in America and my schedule did not go through properly when I was away and I couldn’t get anyone to cover it and so I told my manager. He eventually said “ok, its fine you don’t have to work” but he was very annoyed with me and then gave me less shifts when I came back to work. A few weeks ago, I was in London and I had to call in and you are supposed to call two hours before and they asked “do you want to work” and I said “no, can you ask someone else to cover it if there is anyone else wanting to work” and they said “ok that’s fine but usually you always need to get cover”.
Q: Can you tell me a bit about the scheduling, how does it work?
You can make your availability whenever you want. For my position, I need to be available for Friday or Saturday nights. You let your employer know of your availability and then there is an automatic schedule that the manager then caters to what they want and it comes out around every Thursday, sometimes it’s late and it comes out maybe on a Saturday and the shifts start from Sunday for the next week. So if you have a shift on Sunday it is hard to plan anything if it comes out later.
Q: Generally speaking, how much notice are you given when you are asked to go to work?
It depends. If you have regular shifts then you know usually the Thursday before that week and the week starts on Sunday. If you have to call in, you need to call in two hours before on that day.
Q: So what is the call in system? I’m not sure I understand.
My employer has specific hours that they have in a week and they need to use up all of those hours. We have a District Manager that comes in and reviews everything a few times a month and they get in trouble if they don’t use up all the hours each week. So every week they need to get rid of their shifts or hours but it also depends on how much sales they have. It really fluctuates day to day and you never know a day in advance if they are going to need you to call in later. Some times they will write on the Facebook page saying “we have more hours. If anyone can work, please do”. They will call you and say if you’re available to work and will just have you come in if you can.
Q: Do you ever feel that when you are on duty that you are over staffed or under staffed?
Yes. On Saturdays and Sundays. Especially on Sundays because it is the first day of their week. Everyone who works on the floor comes in on that day. There is always way too many people and during certain times of the year there is not enough things to do except really mundane tasks and then other times it’s completely under staffed. I will be the only one on the floor, the managers will be in the back and you have to do everything. You have to do the tills and maintain all the six rooms. That’s quite tiring when there are a lot of people.
Q: Do you find that the unpredictability of when you are going to work has a negative impact on your financial security?
Because I am a student, not really. Because I am a foreign student, I need finances to live here and so for me its not that bad but for other workers they try and cover as many shifts as possible. If people give away shifts literally in two seconds they say “I will cover you” because they need that work and they want it as regularly as possible.
Q: Is that their only employment? Are they working full time there?
People who do work full time are managers or have just become managers and there are people that have had at least two or three jobs at the same time before but it would usually be with promotion for clubs.
Q: The managers, do you know if they are on zero hour contracts or employees?
I believe they are employees as they are on an annual salary.
Q: Given the choice, would you prefer to work on a contract of employment with set hours as opposed to a zero hour contract?
As I’m a student, I wouldn’t want set hours because this way if I am really busy one week, I can give away my shifts and I’m not contractually obliged to work that week. I have friends that have seven hours a week which isn’t a lot but they still have to work those seven hours or get holiday and so I like that. I can give away my shifts when I need to.
Q: Provided they wont get the hump for when you are actually not there?
Sometimes no one will cover shifts, which is very frustrating and other times everyone wants to cover everything so it really depends on the fact that we have a lot of students that work there so it depends on exams and holiday schedules. During Christmas, no one is there and during exams no one wants to work at all so that is very difficult as well.
Q: The penalty system that you talked about. Is that advertised in your contract? The Staff Handbook? How does that work?
I just learned about this UPN recently. I don’t know what it stands for. It’s not in our contract. It’s just what everyone refers to it as. I just looked at our contract and it says that you will have a warning if you aren’t doing your job correctly or if you miss too many shifts. They write on the Facebook page if you miss too many shifts or don’t come to your call ins, or don’t call for your call ins, that you can be dismissed and so they are not very clear about it, but also the managers are quite friendly and so they do try and get good relationships with us and work with us so it’s not usually a problem.
Q: Turning to your contracts. Can you give some basic details of what your understanding is of the contract you have with them?
In my contract, it says that I need to work a minimum of 4 hours even though it says that it is a zero hours’ contract, and I am supposed to represent the brand and be very outgoing and friendly to customers and always make sure the customers are OK. There are no tasks that are really described. It has a lot about holiday. There are also health and safety regulations and when you start you have an induction where you watch a health and safety video and they then sign the contracts. That’s really about it.
Q: What are the termination provisions in the contract?
I genuinely have no idea. I know a lot of people have stopped working recently because they weren’t able to come to their shifts and they kept giving away their schedules. They recently posted on the Facebook page at the beginning of September that if you are not coming to your shifts then you will be dismissed and a lot of people left. But there are also a lot of people coming and going, we have to hire a certain amount of people a week and so there are always new people coming in and people leaving.
Q: If someone were to say that you could claim benefits that would be paid to you weekly and were a regular guaranteed source of income and these benefits were significantly more than what you received on average under your zero hour contract, would you be more inclined to claim benefits?
I understand why other people would, but I really just want the work experience and I believe that people who do work there enjoy working there, or just want the work experience, so I don’t think they would. But I understand why other people with a zero hours’ contract would if they were not financially stable.
Q: If you were offered a full time position under a zero hours’ contract, would you accept the position?
Currently, no. But if I were just working there and not a student, I would probably want to be a manager on a full-time employment contract.
Q: And what would you say the reasons would be if you, let’s say, finish university, you really want to stay and you need to have full time income?
Then I would want that regularity in my schedule. The managers sometimes take relationships personally and they won’t schedule you as much if they are a bit annoyed with you and you then have to cover other people’s shifts until they start putting you regularly on the rota every week.
Q: How do you feel about not having any employment rights or rights to statutory sick pay, holiday pay etc?
Well we do get 28 days of holiday instead of 25 but that’s not really holiday I think, you can basically take as much holiday as you want as long as it’s only two weeks at a time and because I don’t work there full time or even really part time, it doesn’t really affect me.
Q: How are you compensated for the holiday? You say that you have 28 days. That sounds like statutory holiday under the Working Time Regulations. Do you get holiday pay?
I get no holiday pay except we do get Benefit Days so if you work New Year’s Eve or something like that or if you work a certain amount of hours in a week, I believe you get a Benefit Day which means that you have one shift where you don’t have to work and you are not allowed to work on that day.
Q: Which of the following things would you think would feel most upsetting to you in terms of the avoidance tactics of your employer? Is it acceptable that they use this to maximise the flexibility of the work force? Is it acceptable that they are doing this as a way to keep costs down, avoiding recruiting agency costs and also what are your feelings on using zero hours’ contracts to generally evade Employment Law obligations?
I understand why they want flexible workers specifically for this retail store because it does depend on the hours they need in the store and they do need people coming in and out. Two days ago, I had a call in and three other people had a shift and one person had their shift covered and I didn’t want to be at my call in and I said I would go in if they needed me and they said they did. Two hours into my shift, the girl who covered another girl who had a regular shift, they decided that they didn’t need her and so they sent her home. She still had a few hours left and they could have just not taken my call in in the first place
And for avoiding Employment Law Regulations, I think this is just taking advantage of students that just want to work there in the first place.
Q: Are there a lot of people who have worked there for years or is it just the managers?
There are a few that have worked there for years. A lot of people work during university or are in college so I think there is about maybe 15 now that have worked for over a year. I have worked for over a year and I have seen at least another 15 people leave as I have worked there.
Q: How do you feel about if you work there for another year, when you should have unfair dismissal rights and rights of redundancy etc. Would your opinion change when you have passed the two year mark?
Possibly, but I feel like if you have a good relationship with the managers, they are more understanding. It is a very personal relationship that everyone has with each other and they are very close and I don’t feel like that would affect anything if you did have a close relationship with a manager, but if you didn’t, then I feel that would be difficult.
Q: Are you currently looking for another job or will you be looking for another job?
I think I’m not sick of this job, but it does get to me and involves a lot of work and can be very tiring. So possibly next year, I don’t know if I would work there but I guess I will see.
Q: Do the call ins annoy you because you can’t plan your life at all?
Yes. You can’t plan anything and no one likes covering them because they are so unpredictable. Recently because I didn’t work a lot over Christmas, they have been giving me a lot of call ins but they always make them regular and I don’t understand why they can’t just say that they’re regular instead of telling me it’s a call in. So it’s really hard to plan things.
Q: Can you give a specific example when this has messed up something in your personal life?
Yes, sure. I had plans a couple of weeks ago and I had a call in and everyone said that they wouldn’t cover it and that they probably won’t need it. So this is when I called and asked “can I please not work” and they said “yeah that’s fine” but they weren’t happy about it at all. I had a whole weekend planned and if I had to go then I would have had to leave early Saturday morning and go all the way back to Brighton from London and just not do anything that I had already paid for.
Q: And as you didn’t get a call in then you just don’t get work, is that how it works?
Well you get regular shifts and you can always cover shifts. The Facebook page is really active. You get at least 20 notifications a day of people trying to swap shifts and that’s what’s really great about it is that there is a lot of flexibility for workers and so if you have something to do, someone usually does swap your shift if you’re a regular. Especially if it’s in the morning. Someone just posted “can someone swap a shift from 8 to 12 another day besides Monday?” This way at least it’s fair.
Q: In the zero hours’ contract, does that mean that you are actually being paid below the minimum wage?
I’m paid £6.50 because I’m over 21 and I know if you’re under 21 there is a different minimum wage but they abide by that very carefully.
Q: And how are you taxed?
I get all my tax back. It comes directly into my bank account.
What do you mean?
I’m not really sure. There’s just always a tax refund entry on my payslip and it goes back into my bank account after my salary is paid and I shouldn’t be taxed because I make less than the taxable amount.
Q: But they still process you through the Pay As You Earn system?
I’m not really sure. They told me that I wouldn’t be taxed but then I get about maybe 74p a month or every two weeks back into my account from it.
Q: Ok, alright. So there’s some accounting mechanism at work there?
There’s something a bit strange about it. I don’t really understand it.
Q: Anything else you would like to say about people thinking about going on to a zero-hours’ contract?
I think that for students they are a good idea because then you’re not obligated to work when you can’t and there are a lot of reasons when you can’t work at certain times, like holidays and exams. I just think you need to make it clear with the employer that you do have a right to say “I can’t work” and they shouldn’t punish you for that. That is what they do.
Q: That is clearly not a situation where they can say “come in” or you can say “no I don’t want to”.
Yeah, the good thing is, if they need you, you can come in early, you can ask on the Facebook page. You can just call the store and if you want work and say “do you have any hours left this week” and they might. I do that over the summer. I worked a lot. I worked about 12 hours a day. That was really nice because I was able to support myself instead of asking my parents. I was able to work a lot and because of that I had a good relationship with the managers over the summer and so they always gave me work. When they knew I wanted work, they would always call me if they needed someone to come in.
Q: It's still quite unsettling that its so dependent upon how you get on with this one person isn’t it?
Yes. Yesterday, no Saturday, we had a new manager who no one really gets along with. She is very sweet but she just seems a bit like as if being a manager has gone to her head and she’ll tell you to do a task and then she is very condescending about it. She will tell you to do something which you definitely are able to do, like fold something and make it in a straight line, but then she’ll give you clear instructions and a mini life lesson about it and then she says “well if you would do this properly and smile and talk to customers more, you would get more shifts”. So I think that was, first of all, a rude remark and way too personal and just unnecessary. But she also doesn’t make the schedules so she does not have authority to say that.
Usually the Store Manager is the top manager who’s a lot nicer. But he does get very moody. We have District, Regional and then European Managers that come in and rate the store. Everything needs to be perfect on those days. They will only have employees come in that they know that these managers will like. The District Manager comes in the most so they will have a list of people that they know get along with the District Manager and they’re the only ones that are allowed to work when the District Manager is there. If someone comes in on that day wearing too much makeup or if they’re not in the correct clothing, the managers of the store will tell you to go home if you don’t look the part and this has happened sometimes. One of the girls who was sent home was actually a manager and she was sent home because she had too much makeup on. Another girl was wearing a black bra with a white shirt so she had to go home. Another girl and I were wearing the same dress that was not cut low but showed a bit of cleavage and so they put us on the tills so we would boost sales. It’s very sexist if nothing else. I had a hair tie on my wrist and they told me to take it out. I have a piercing on my upper ear and my manager asked me to take it out and I said I needed pliers to take it out so my manager said put your hair over it. I think that is what’s the most difficult for a lot of employees.
Q: So it’s a sexualised environment?
One of the new managers used to be an employee who worked on the floor a few years ago while he was at uni and now he’s the manager. He’s been hiring only girls lately. So recently we had interviews for new employees every Tuesday and Friday and one of the girls interviewed and she made sure to hire some guys. When the district and regional managers come, everything needs to be perfect.
Q: Would you ever consider the fact that you could be covered under discrimination legislation or sexual harassment legislation? This seems to be quite a sexual environment.
It is and it is quite ridiculous and employees should be protected by it, especially for a lot of people who do get sent home if they are not in the correct attire or if the Regional Manager does not like them.
Q: Tell me a bit more about the recruitment process. How they actually recruit people?
We don’t accept CVs. People can come in and they can apply online. There is an application that you have to fill out and there are passwords and so if you come into the store, we give you the passwords and then once you have filled that in, you can call the store and come in on Tuesdays and Fridays and have a group interview. In the group interview they ask you a few questions, then you fill out if you want to work on the sales floor or in the back. Working in the back involves organising new shipments and preparing products to go onto the floor. Employees at the front and deal with all the customers and have to maintain the store. Also people on the front or Managers will look around the store and see customers who look the part and they give them a recruitment card and ask them to work there. That’s how I got employed.
Q: And what about the physical aspect of people. How do they check that?
You have to take a picture of everyone that applies. So when you come in for the group interview, even if you are recruited, you have to come in for the group interview and we take a picture of you. That picture is then sent to the head office. Head Office then decide whether they want you or not based on your picture. The reason they say they do this is because they say they recruit for advertising from the stores and so this is a two way street and they do not have a separate agency for the advertisements. Once the head office has recruited you, then you have to come in and you have to be dressed. We have “in season” looks and there’s a look book and you have to dress in an outfit exactly as it is in the look book. We then take a picture of your full body in that outfit. They then send that back to the head office so they would have it on file and then you start working.
Q: Has there ever been anyone where you have worked with that actually became models?
Yes there are a few people. I had a picture with two other girls that was reposted onto the store page and onto their Instagram and that had so many hits that they wanted to recruit all three of us. This was over the summer and none of us just went through with it. There are two girls that have been on adverts that are in our store. So it is quite frequent.
Q: Alright, so it’s not just something they tell you?
Yeah, it’s not something they tell you. They do take it very strictly. Also our store has been voted the best managed in the UK and in Europe and we also have the best employees in the UK and Europe and so I think our recruitment is very strict but our managers also get rewarded for it. When our Instagram picture blew up on their Instagram, our store manager got so much appraisal from the Regional Manager and she favours us a lot because of that.
Q: Did that ever then trickle down in monetary terms to you?
No and they didn’t ask if they could repost. The other two girls that I was with really like the attention of being on everyone’s Instagram. I just don’t like everyone looking at my picture so I found that a bit uncomfortable but one of my managers asked if they asked me if it was OK and I said no and she was like “that’s strange”. Since our picture was reposted they started doing this a lot with other peoples pictures so it started quite a trend.
Thank you very much for your time.
Sofie has recently joined the firm and heads up the Employment department specialising in all aspects of employment law. She has a particular interest in Tribunals and drafting employment contracts, staff handbooks and settlement agreements. Sofie also works closely with our Commercial Property and Residential Property departments specialising in Collective Enfranchisement, which is flat owners entitlement to collectively purchase their own freehold, the Right to Manage and Lease Extensions. She is committed to reaching the best commercial outcome for our clients.
Sofie speaks fluent Swedish and Chinese and graduated with a Chinese & Politics honours degree from School of Oriental and African Studies in 2005. She then spent a few years living and working in China before returning to the UK to qualify as a solicitor. In her free time she enjoys scuba diving, boxercise, running and travelling.
She can be contacted at +44 (0)1273 204411 or by email to firstname.lastname@example.org
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