With the continued use of zero-hours contracts, and the introduction of the National Living Wage around the corner, employers also need to remember the other rights that zero-hours workers have.

Background

The term 'zero-hours' indicates a contract for casual work under which the employer is not obliged to provide a minimum (or any) amount of work to the worker. In essence, zero-hours contracts allow employers to put workers 'on-call' permanently but with no obligation on the employer to actually offer work or on the worker to accept it. Zero-hours contracts are increasingly popular and the number of individuals engaged on such contract continues to rise year on year.

Since 11 January 2016, Regulations came into effect to provide additional protection to both employees and workers where they are respectively employed or engaged on a zero-hours contract and where their contractual terms contain a now-unenforceable exclusivity clause.

Because of the new Regulations, and the additional legal protections afforded to employees, employers are well advised to limit the employment status of those engaged on zero-hours contracts to 'workers' only. Even where this is the case, such 'workers' will still have the following and often forgotten legal rights:

National Minimum Wage and National Living Wage

All workers have the right to receive the National Minimum Wage ('NMW'). For adult workers, this is currently set at £6.70 per hour, however, the following increased NMW rates will apply from October 2016:

Standard (adult) rate Workers aged between 21 and 24 £6.95 per hour  
Development rates Workers aged between 18 and 20 inclusive £5.55 per hour
Young workers rate Workers under 18 but above the compulsory school age that are not apprentices £4.00 per hour 
Apprentice rate Apprentices under 19 years of age or those aged 19 and over but in their first year of their apprenticeship  £3.40 per hour 

As mentioned above, the introduction of the National Living Wage ('NLW') also means that, from 1 April 2016, workers aged 25 and over have the right to receive a premium on top of the NMW, starting at 50 pence per hour. By 2020, it is intended that the NLW will increase to £9.00 per hour.

Working Time

Whilst it is unlikely that zero-hours workers will be working excessive hours (in excess of the permitted average 48-hour week, subject to any agreed opt-out), they still do have the right to annual leave and pay, and rest periods and breaks, in accordance with the Working Time Regulations 1998.

Zero-hours workers have the right to receive a pro-rata equivalent of 5.6 weeks' annual leave per annum, calculated in accordance with the number of hours actually worked. With regards to rest periods and breaks, employers need to ensure that zero-hours contract workers receive the following:

Daily rest  A daily rest period of not less than 11 consecutive hours in each 24 hour period 
Weekly rest  An uninterrupted weekly rest period of not less than 24 hours in each seven-day period
Rest breaks An uninterrupted period of at least 20 minutes, away from the workstation, if they work for six or more hours

Unlawful deduction of wages

Workers are protected by the right not to suffer an unlawful deduction of wages from their employer, and can complain to the Employment Tribunal about any such deductions and seek reimbursement of any sums involved.

Discrimination

The Equality Act 2010 provides protection against discrimination to all workers. Employers should therefore ensure that zero-hours workers are not treated less favourably, suffer any detriment, are harassed or otherwise victimised because of any of the following protected characteristics:

  • age
  • disability
  • gender reassignment
  • marriage or civil partnership
  • pregnancy or maternity
  • race
  • religion or belief
  • sex
  • sexual orientation

The level of compensation that can be awarded by an Employment Tribunal for successful complaints of discrimination is unlimited. Employers should therefore ensure that they adopt equal opportunities policies and practices throughout their business, train staff on the importance of equal opportunities, and take appropriate steps or action against anyone acting in contravention.

Whistleblowing

Workers are protected from suffering any detriment as a result of them having blown the whistle (i.e. making a protected disclosure). Compensation for such claims is unlimited, will be calculated on a 'just and equitable' basis, and can include an amount of compensation for loss of earnings or benefits, injury to feelings and/or personal injury.

Pension auto-enrolment

In line with the definition of a 'worker' in the Pension Act 2008, zero-hours workers may be subject to the pension auto-enrolment regime. Employers have a duty to auto-enrol eligible jobholders into an automatic enrolment scheme from the date that the jobholder becomes eligible, unless they are already active members of a qualifying scheme. Zero-hour workers would be eligible jobholders if they are at least 22 years old and have not reached state pension age and they earn more than the earnings trigger (currently £10,000 per annum).

Conclusion

In addition to being compliant with the increasing amount of legislation in the area of zero-hours contracts, employers must ensure they remember the multitude of other rights conferred on zero-hours workers.

In addition to this, if employers do take the brave step of defining those individuals working on zero-hours contracts as 'employees' in their contracts, they must also be mindful that these zero-hours employees will also have additional rights in respect of unfair dismissal and automatic unfair dismissal, as well as the plethora of family friendly rights and more.