What is the status of workers engaged in casual or zero hours contracts?

Alan Price discusses the finer points of part-time contracts and what they mean for employers and workers.

While these types of contract carry connotations of flexibility and reduced responsibility towards individuals upon employers who use them, the reality is that the employment relationship is not actually governed by the contract given to someone, it is in fact the way that the relationship is run, and the decisions that the employer makes on a day-to-day basis with regard to the individual in question. An analysis of these things will need to be done in order to properly establish the employment status of an individual between employee, worker or self-employed.

While the contract provided can genuinely indicate the intention of the employer at the start of the employment relationship of whether that person, the employment status of a person can be fluid and either intentions may change, or more often, an employer can unwittingly alter the nature of the relationship by their behaviour.

‘Casual’ and ‘zero hours’ are terms which are commonly used interchangeably by people who are describing a flexible working relationship which does not operate under the same constraints as a full employment relationship. Both can mean an up and down nature of working; some days or weeks the individual will work because of an increase in demand for the employer’s business, and others they won’t. This practice is the norm under these contracts because neither guarantee the provision of any hours of work and this is the most obvious difference to an employment contract, where there is a requirement for a minimum amount of work to be provided and a corresponding requirement for the employee to do that work.

Where this dual requirement, known as mutuality of obligation, is lacking, then the relationship cannot be one of employment, and will instead be casual. Where the person doing the work cannot send a substitute instead of them, then their employment status will be that of a ‘worker’ and consequently, the ‘worker’ rights will apply.

See also: What sort of contract will I need if I want to employ staff on a flexible basis?

In reality there is little difference between a casual worker and some kinds of zero hours contracts. This is because a zero hours contract can work in the same way as a casual in that there is no mutuality of obligation, ie when work is offered, the individual can turn the work down if they wish.

Other zero hours contracts, however, operate in a different way and require the individual to accept the work when it is offered. This creates the mutuality of obligation necessary for the individual to be an employee and therefore be entitled to the greater number of employment rights rather than ‘worker’ rights.

This distinction was confirmed with the recent changes to zero hours contracts seen in 2015 and 2016. Exclusivity clauses were banned in all zero hours contracts meaning that employers cannot prevent their zero hours staff finding more work elsewhere. Enforcement of this provide routes for both zero hours employees to claim unfair dismissal if they are dismissed because they have found more work elsewhere, and zero hour workers who can claim detriment for the same reason.

See also: Zero hours contract rights

Even where casual or zero hours contracts are not intended to contain a mutuality of obligation, a pattern of behaviour which, in practice, inserts the obligation into the contract of the provision and performance of the work can persuade an employment tribunal that the individual is an employee and not a worker.

Alan Price is employment law director of Peninsula.

Further reading on employment contracts

Related Topics

Zero-hours contracts

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