Which contract of employment is best for my business?06/09/2016
Sports Direct have been severely criticised this year following an investigation by the Guardian newspaper and a subsequent BBC investigation and then an appearance by the owner of Sports Direct, Mike Ashley, in June before the Business, Innovation and Skills select committee regarding the working conditions at its Shirebrook warehouse.
In response, on 6 September 2016, Sports Direct announced that it will now offer its directly employed casual retail staff a guaranteed 12 hours per week instead of zero hours contracts. However, not all of the staff at the Shirebrook warehouse will be eligible to receive the guaranteed 12 working hours per week. This guarantee will be limited to the company’s 18,250 casual workers who work at its stores nationwide. This guarantee of hours will not apply to the 4059 warehouse agency workers – with only 400 of the company’s warehouse employees employed on permanent contracts of employment.
So what issues should an employer take on board when considering the use of zero hours’ contracts and agency workers?
Zero hours contracts are designed for use when an employer wants to engage a worker on an “as required” basis. There is no actual guarantee of work, despite the expectation that the individual will be expected to be available for work when this is offered. Some employers provide that an individual worker may be allowed to refuse work on a set number of occasions in a defined period of time. Furthermore, a zero hours contract can also be labelled as a bank contract because the individual worker forms part of a bank of workers who may be called upon to work as required.
The main issue that arises with zero hours contracts is whether (despite any contractual terms stating to the contrary) the individuals are, in fact, employees. From an employer’s perspective, it is therefore important to ensure that the terms of the contract reflects the fact that this is for an individual casual worker; and then to also ensure this is followed up in practice in respect of the employment relationship. Furthermore, since 11 January 2016, employers have been prohibited from using exclusivity clauses in such contracts and employees now have the right to claim unfair dismissal and workers and employees also have the right to bring a detriment claim in a zero hours contract.
By contrast, agency workers are individuals who sign up with an “employment business” to work for one or more of their clients. Commonly, they are engaged to undertake certain pieces of work or for a specific period of time. However, agency workers can also sometimes be engaged to work on an open ended basis.
Genuine agency workers have specific statutory rights and these include:
- The right to receive the same pay and other “basic working conditions” as equivalent permanent employees after a 12 week qualifying period.
- Access to collective facilities and to information about employment vacancies from the first day of their assignment.
- Potential protection against discrimination by the “employment business” and, in certain instances, by the end user client.
- Entitlement to receive the National Minimum Wage.
- If an agency worker is an “employed earner” for National Insurance purposes, they will be entitled to receive statutory sick, maternity, paternity, adoption or shared parental pay from the “employment business”.
- If the agency workers are indeed employed by the “employment business” then they will be entitled to take statutory maternity, paternity, adoption or shared parental leave.
- Protection under the Working Time Regulations 1998 and in relation to Whistleblowing.
Interestingly, since Brexit one of the areas of law identified by many commentators as being possibly subject to wholescale change and/or possible repeal are the Agency Workers Regulations 2010 which provided these aforementioned specific rights and has caused widespread consternation amongst certain businesses/sectors.