What is the key issue when assessing whether or not a contract is indeed a zero hours contract? Mutuality of obligation, holds the Royal Court in Marchem (Europe) Limited v Carre.

Ms Carre was engaged as a bookkeeper by the appellant, Marchem. On termination of Ms Carre’s contract she sought to pursue a claim of unfair dismissal. This was defended on the basis that, as a zero hours worker, she was not an employee and therefore did not have the benefit of protection from unfair dismissal.

The contract stated “We shall offer you a minimum of 30 hours of extended work a week…” The Tribunal found that there was a genuine expectation on Ms Carre’s part that work would be provided and that “…the contract of employment contained a clear mutuality of obligation…”

Marchem appealed this decision to the Royal Court, which found that the Tribunal had erred in law. While there may have been a contractual obligation on the part of the business to offer work it had failed to consider whether Ms Carre was obliged to accept that offer and work for 30 hours each week. The case was remitted to the Tribunal.

Comment

Use of zero hours contracts has been reviewed in the UK with the Business Secretary, Vince Cable, saying that while such contracts may be open to abuse in some circumstances:

“Zero hours contracts have a place in today’s labour market. They offer valuable flexible working opportunities for students, older people and other people looking to top up their income and find work that suits their personal circumstances.”

In 2013 JACS expressed concerns about the use of zero hours contracts but recognised that they can be useful, including “when an employer needs a bank of ‘casual workers’ who are available to be called upon to meet workload peaks”. Subsequently in 2015 JACS published updated guidance on use of zero hours contracts (see www.jacs.org.je) and a report on zero hours working in Jersey was published on 06.05.15.

We recommend that caution is applied when considering using zero hours contracts. If in doubt take advice at an early stage.

Case:                            Marchem (Europe) Limited v Carre

Type of claim:             Zero hours contract; employment status; appeal to the Royal Court

Judgment date: 21.04.15