I have just taken over as HR manager at a food company which hires lots of casual and seasonal workers and students during the summer and early autumn. I’m unsure about the status of such employees and especially what zero hours contracts are.
Determining the status of your workforce is essential in assessing what rights they have. Key employment rights, such as the right to claim unfair dismissal, are only available to employees, but there are now also rights that are available to ‘workers’ as well as employees.
Casual and seasonal staff will undoubtedly meet the ‘worker’ definition (meaning, for example, they are entitled to paid holidays and the minimum wage), even if they are not employees.
While there is no simple test for determining whether an individual is an employee, there are two core elements that must be present in every employment contract: an obligation on a person to provide the work personally and mutuality of obligation. If an individual is free to undertake work or not when it is available, and an organisation is under no obligation to offer the work, then it is very likely that the individual is not an employee. The definition of ‘worker’ is wider in scope and, while including employees, it is also likely to include all those providing work personally.
To ensure your casual staff are workers rather than employees, it is essential that there should be no obligation to provide or accept work. This may, for example, take the form of performing a one-off task, or working under a ‘zero hours’ contract, which means the employer doesn’t guarantee to provide work, and only pays for work actually done.
If a worker challenges the employer and claims to be an employee, the courts will look at the nature of the individual assignments. For example, if there is sufficient mutuality of obligation during each engagement to constitute an employment contract, a lack of mutuality between assignments will not prevent the successive engagements from constituting contracts of employment.
As an HR manager, you need to assess the business needs to ensure you can properly justify the level of risk associated with the relationship you need to get the work done.
By Gagandeep Prasad, solicitor, and Jo Wort, professional support lawyer, Charles Russell LLP
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