Commentary: Zero Hours Contracts

We expect that over the past few weeks you have noticed an increased amount of publicity, both adverse and positive, together with challenges about the use of zero hours contracts by UK employers. Zero hours contracts have been credited by some as providing the flexibility needed to meet fluctuations in the demands of businesses to survive the recession and ensure that staff are kept in work.

Some consider that the flexibility given by zero hours contracts has enabled our labour market to flourish. However, the use of zero hours contracts has proved to be controversial and a recent study has found that one in four companies employ someone on a zero hours contract. The Recruitment and Employment Confederation has undertaken research with approximately 600 employees that showed that 25% of those surveyed used zero hours contracts.

A zero hours contract is a contract of casual working, under which the employer does not guarantee to provide the worker with any work and pays the worker only for work actually carried out. The worker is expected to be available for work when or if called on by the employer. There is actually no definitive legal meaning for zero hours contracts and therefore there is scope for different interpretations.

It may also be used to describe an arrangement where the worker is free to accept or refuse work when offered. Increasingly, many employers in industries such as retail and hospitality offer work on zero hours contracts, which effectively provides them with a pool of people who are “on call” and can be used when the need arises. Whilst the employer is not obliged to offer work to workers on zero hours contracts (and nor is the worker obliged to accept any work offered), it is important for employers to note that the provisions of the National Minimum Wage Regulations, which state that workers on “standby time”, “on call time” and “down time” must still be paid the National Minimum Wage if they are at their place of work and required to be there. Similarly, such time is likely to count as “working time” under the Working Time Regulations if the worker is required to be on call at the place of work. This means that it is against the law to ask employees to “clock off” during quiet periods but still remain on the premises.

It is recognised that zero hours contracts do suit some people who want to occasionally earn wages and are able to be entirely flexible about when they work. However, the unpredictable nature of working times means that they are unlikely to be suitable for the majority of work seekers. It is with the majority that concerns lie and controversy has raged.

The Business Secretary, Vince Cable, has commented that he fears zero hours contracts are being abused and that there has been “some exploitation” of staff on contracts which give no guarantees of shifts or work patterns. Mr Cable has been leading a review on the issue for the government since June and in September will decide whether to hold formal consultation on specific proposals. The unions have called for them to be banned in their entirety and Dave Prentis, General Secretary of the UNISON union has said that “The vast majority of workers are only on these contracts because they have no choice. They may give flexibility to a few, but the balance of power favours the employers and makes it hard for workers to complain”.

The question of zero hours contracts was raised by Mark Hope, Managing Director of Stonehouse Logic, at the recent Lancashire Business View event “The Hot 100 Q&A” which took place at Brockholes. Mark asked the panel whether their companies used zero hours contracts and their response was no. Mark, whose company is a client of Taylors, gave his opinion that “Whilst having a flexible workforce is important, in particular in sectors where staff resources and requirements fluctuate hugely, it is hard for me to see how a zero hours contract is a fair relationship between an employer and employee for anything other than short term contracts. It appears to leave people in a form of employment limbo and exclusively benefits the employer”.

Although we have worked with industries over the years to provide them with zero hours contracts, particularly in retail and hospitality where seasonal demands require flexibility in staffing levels, we would recommend that employers always consider carefully the right employment status for an individual being asked to work and to ensure that the arrangement is recorded properly in writing to ensure clarity to both employer and employee.

Perfect Recruitment

At the Lancashire Business View event at Brockholes for the “Hot 100 Q&A”, it was interesting to note that each of the Hot 100 panel representatives gave credit to their staff when discussing their company’s successes. One issue that was identified, however, was how some of the businesses had struggled to attract applicants to posts that were of the right calibre and the frustrations with the recruitment process.

We would like to take the opportunity to remind you that the next Lancashire HR Exchange event on 19 September 2013 is addressing the key topic of perfect recruiting. We are delighted that we will be joined at the event by our guest speaker, Sarah Heath, who is the Recruitment Manager for Tangerine Group.

A discussion session will also be led by Rachel Mitson of AFR Consulting and Laura Hartley of Laura Hartley Recruitment. This session is proving as popular as ever and if you have not already booked a place, then please get in contact. Alternatively, if you are not able to make that date, the session will also be held at the Manchester HR Exchange on 28 November.

In the meantime, the Manchester HR Exchange will be held on 12 September at The Imperial War Museum North, featuring equality and diversity in the workplace. This session will see us joined by guest speaker Mark Wright from the Equality and Human Rights Commission and Dave Harrison from event partner, 10Eighty, who will discuss the benefits of employing a diversified workforce for the talent management process. This session will be run in Lancashire later in the year on 5 December.

If you are interested in attending any of our HR Exchange events, then please visit www.thehrexchange.co.uk to book your place online. Alternatively, you can telephone us on 0844 8000 263.

Case Law Update

Does a finding of gross misconduct by an employer automatically mean that dismissal is within the band of reasonable responses that an Employment Tribunal looks at?

In a recent case heard by the Employment Appeal Tribunal (Brito-Babapulle v. Healing Hospital NHS Trust), the employee (a hospital Consultant) had been treating private patients whilst on sick leave from the NHS and for this reason the NHS dismissed her for gross misconduct. The employee appealed against the Tribunal’s decision that her dismissal was fair.

The EAT found that the Tribunal was entitled to conclude that it was reasonable for the employer to find the employee guilty of gross misconduct, but found that the Tribunal had been wrong in assuming that this inevitably meant that dismissal was within the band of reasonable responses. The EAT has sent the case back to the Tribunal to consider whether it was reasonable in all the circumstances to dismiss the employee for gross misconduct. The Tribunal has been directed that it must assess whether dismissal is a reasonable sanction, having regard to the mitigating circumstances of the case.

The employee had put forward in the case the distinction between her NHS job as a Community Worker, which she was unable to pursue because it involved riding a bike and she had had a knee injury, with her second private work which was sedentary. She could perform the latter role despite her injury, whereas she could not do the former. She also put forward the position that she had not realised that what she was doing was wrong and that what she was doing should not have been construed as fraud, the reason relied on by the employer for gross misconduct.This case serves as a useful reminder to employers to consider very carefully the reason that they are relying on for dismissal and to not assume that in finding that someone is guilty of gross misconduct their dismissal should automatically follow.

Mitigating circumstances should always be taken into account and consideration given to whether there is an alternative to dismissal. Although Employment Tribunals, following established case law principles, are not entitled to decide what they would have done if they were an employer, they will consider whether the employer’s decision was a reasonable response and will take matters such as mitigating circumstances and alternative sanctions into consideration.

Data Protection Act and Subject Access Requests

The Information Commissioner has published a Code of Practice on how to deal with Subject Access Requests for personal information from individuals under the Data Protection Act 1988.

It provides a very useful guidance for Data Controllers on how to respond to Subject Access Requests, explains how to deal with requests involving other people’s information and gives practical examples of requests and various exemptions.

If you are dealing with an individual’s Subject Access Request, then this Code of Practice will provide you with an invaluable starting point for responding. We do appreciate, however, that the Data Protection Act continues to be a complex area for employers and if you do require any assistance, then please do not hesitate to contact us.

The Code of Practice can be accessed on the Information Commissioner’s website at www.ico.org.uk.

Your Questions Answered

An employer recently asked what approach should they take when an employee’s disability interacted with other ailments and how they should make reasonable adjustments for absences as a result.

The employee’s disability was asthma and the condition was exacerbated by respiratory infections, which resulted in some absences from work. The employer had a policy that stated where an employee was absent through illness for 10 days or more in a year, the employer would consider subjecting the employee to disciplinary action. The employee complained that this policy put her at a disadvantage and that the employer had accordingly failed to make reasonable adjustments, which it was bound to do under the Equality Act 2010.

There are two possible avenues that an employer can take in dealing with this type of situation. Firstly, you should consider, with expert evidence, the periods of absence and attempt to analyse with precision what was attributable to disability and what was not.

Alternatively, you should ask and conclude with proper information, what sort of periods of absence would the employee be reasonably expected to have over the course of an average year due to the disability. It is acceptable for an employer to count absences that are not related to disability to trigger an absence management procedure and there are circumstances where employers can consider taking into account absences that are related to disability but these are in particular areas that need to be looked at closely and very carefully.

Each individual’s circumstances will be very different and advice should be sought in both seeking expert medical evidence and in implementing the guidance that is given.

If you have any queries in relation to this problem or a question that you would like to ask the team and share with our other readers, please send it to us and we would be delighted to use it in a future edition of Employ!