When is a zero hours contract not a zero hours contract?

31st October 2013 The topic of zero hours contracts, and the increasing use of such contracts, has been very topical lately. This has resulted in a debate in the House of Commons on the use of zero hours contracts. However, one thing that became clear in that debate is the fact that there are many forms of contract or arrangments that are known as "zero hours" contracts. There is no single form of zero hours contract.

A recent ruling from the Employment Appeal Tribunal (EAT) in the case of Borrer v Cardinal Security Ltd highlights the confusions surrounding zero hours contracts, and the fact that a contract may in fact not be a zero hours contract despite the fact that the employer claimed it was.

The case concerned a security guard that worked a regular 48 hours per week, usually at the same supermarket, for his employer. The statement of main terms of employment referred to the employee being "required to work at any of the company's assignments and it is a condition that you are prepared whenever applicable to transfer to any other of the company's assignments." In respect of pay the statement said that "you will be paid the rate applicable to the assignment to which you are allocated.....On your initial assignment the hourly rate will be agreed". On the subject of hours of work the statement said that "Your hours will be specified by your line manager." No minimum number of hours was specified in the statement. The superstore made a request that the security guard be moved from their premises. He then moved to a different store for a couple of weeks. However, after that no assignment could be found for him. He was subsequently given the opportunity to take three shifts at a different shop. The employee submitted his resignation stating that the employer had not offered him enough hours. He claimed that the employer was acting in breach of his contract, stating that he had always worked the same hours throughout his employment. The employee had texted the employer every week to confirm his work for the coming week. The employer argued that he had a zero hours contract and no set number of hours were guaranteed. The Employment Tribunal agreed with the employer and rejected the claim of constructive unfair dismissal.  

The EAT ruled that the full facts and circumstances should be considered in order to find out the true nature of the agreement between the employer and employee. This included a consideration of the conduct of the parties and their expectations. The original Tribunal had concluded that as no set hours were specified, and that it was instead made clear that the employee had to work the hours specified by the employer, plus the fact that the employee texted the employer each week to check where he was to work, that in fact this was a zero hours contract. The EAT concluded that the evidence as a whole demonstrated that the employee had a contractual entitlement to work 48 hours per week, although the rate of pay could vary depending on the assignment he worked on.

The case highlights the fact that if there is to be a genuine zero hours contract, there must be an express provision stating that there are no guaranteed number of hours of work. Employers should use such written provisions to clarify this, even if the practice of zero hours arrangments are common in their industry. Employers should have detailed written contracts for staff stating exactly what is and what is not expected of each party, including on the subject of hours of work. The courts and Tribunals will not always agree that a contract is a zero hours contract unless it is made clear in writing to both parties. 

If you need advice on this subject please do not hesitate to contact Hallett Employment Law Services Ltd.