The Court of Session’s recent decision in the Global Resourcing Case perfectly illustrates the employment and social issues thrown up by zero-hours contracts. In this appeal to the Scottish equivalent of the Court of Appeal, the issue was whether the employer had unfairly dismissed a group of welders who had been forced to move from guaranteed hours to “ad hoc contracts”. At present we still don’t know the final answer: the case has been remitted to the employment tribunal to make a fresh decision.
The tribunal had originally decided that the dismissal had been unfair, mainly because the employer appears not to have appreciated that workers moving to a zero-hours regime would lose their employment status, and with it the right to statutory redundancy payments and other employment protection rights. The Employment Appeal Tribunal overturned the ET’s decision, substituting a decision that the dismissal was fair. The Court of Session has in turn quashed the decision of the EAT, and ordered the ET to look again at the issue of whether the dismissals were fair. It has pointed out that making a mistake about the legal position is not in itself enough to make the dismissal unfair.
Could and should Global Resourcing have got the law right? Or was the EAT correct to overlook this failing in the light of the employer’s overriding need to cut costs when it had suffered a “serious downturn in business”. The Court of Session has not spelled out the answer, since this remains a question for the employment tribunal to decide. It has however suggested that one key issue for the ET will be whether it was “excusable” for the employer to make a mistake about the law. That is one factor to assess when looking at the overall reasonableness of the decision to dismiss, and would in part depend on whether the employer obtained legal advice.
So in short, while it is hardly a good start to get the law wrong, this case illustrates that doing so is not necessarily fatal to a successful defence of an unfair dismissal claim. One of the draw-backs of using relatively unusual contracts in an employment context is that their legal effect is harder to assess. Zero-hours or ad hoc contracts take many forms. Whether or not people working under them have the status of employees is likely to depend not only on the legal small-print, but the way the relationship works on the ground.