Irwin Mitchell | Employment Update | Zero hours ‘workers’ gain unfair dismissal rights

Earlier this year, exclusivity clauses in zero hours contracts (which are those that seek to prevent a worker from working for another business) were banned, in the sense that the employer could not enforce them. However, there was no protection available for workers who were dismissed because they worked for other organisations, or who were refused work because they challenged the legality of their contracts.

Draft Regulations have been published which will protect workers.

What new rights will be available to zero hours workers?

The draft Exclusivity Terms in Zero Hours Contract (Redress) Regulations 2015 only provide protection for those workers engaged on zero hours contracts who are dismissed or suffer a detriment where their treatment is linked to an exclusivity clause in their contracts of employment. Specifically, it includes the right:

  • Not to be unfairly dismissed if the reason (or main reason) is that the employee has worked for another employer in breach of an exclusivity clause contained in their contract of employment.
  • Not to be subjected to any detriment (such as being denied work) because the worker has breached the terms of their exclusivity clause or has refused to agree to such a term.

Will an employee need two years’ service to bring an unfair dismissal claim?

No. There is no qualifying period, but claims will have to be issued within 3 months of the date of the dismissal (or detriment). The right to claim unfair dismissal is only available to those individuals who are deemed to be employees (rather than workers), but the provisions relating to the right not to suffer a detriment are available to employees and workers. This means that workers will be able to bring a detriment claim if they are dismissed, or suffer any other detriment.

Will these rights provide protection for all workers engaged on zero hours contracts?

No. The draft Regulations only provides protection for workers whose contracts expressly or impliedly contain exclusivity terms. Zero hours contracts are not unlawful and employers can still use these.

How much will a worker receive if he/she brings a successful claim?

An employee who brings a successful unfair dismissal claim will be entitled to a basic and compensatory award which will be calculated in the normal way and will be subject to the appropriate caps.

A worker who is dismissed is also entitled to compensation which must not exceed the amount he/she would have been awarded if they had been able to bring an unfair dismissal claim.

Employees and workers therefore have parity in terms of the compensation that can be awarded to them if they are dismissed.

Will employers be able to get around these Regulations by entering into contracts which provide for a minimum number of hours per day or week?

A zero hours contract is currently defined as:

"A contract of employment or other worker's contract under which (a) the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker, and (b) there is no certainty that any such work or services will be made available to the worker."

Essentially this is a contract under which the employer does not guarantee to provide any work to an employee or worker.

It is likely therefore, that employers who engage staff for a minimum number of hours per week will take their contracts outside the scope of this protection. Before the general election in May the coalition Government published the draft Zero Hours Workers (Exclusivity Terms) Regulations 2015 which intended to extend the ban on exclusivity clauses to a wider range of contracts. These Regulations were not passed, and it remains to be seen whether they will resurface.

When will the Regulations come into force?

No date has been fixed yet, but we anticipate the Regulations will come into force in the spring of next year.

Employment Law Update - November 2015

Key Contact

Omer Simjee