Controversy over zero-hour contracts continues

3 November, 2014
by: Cripps Pemberton Greenish

Following recent legal action brought by a former zero-hours employee, Sports Direct have agreed to be more transparent with the types of contracts they offer. The claimant left her employment with the retailer in July 2013 after experiencing panic attacks, which she attributed to the continuous lack of financial security under the terms of her contract.

It was argued by the Claimant that “zero-hour workers are not second-class workers…They have the right to be treated fairly and with respect. They have the right to take holidays and to be paid when they take them. They have the right to statutory sick pay”.

As a result of this action Sports Direct has agreed to re-draft their job adverts to ensure total transparency for future employees, update its employment documents to clearly detail any entitlement to sick pay and holiday pay and distribute copies of the new policies around all their UK branches.

This case serves to warn employers of the risks associated with the use of zero-hour contracts. Whilst these types of contracts can be useful for companies which require a flexible workforce, employers should be mindful not to fall foul of their legal obligations.

The Small Business, Enterprise and Employment Bill which was published on 25 June 2014, and expected to become law in early 2015, will provide the first formal guidance regarding zero-hour contracts. Importantly, it is expected to provide that exclusivity clauses which restrict zero-hour contract workers from working for other organisations will be unenforceable. In light of this new legislation, it is worth employers reviewing both the terms and practical implementation of their zero-hours contracts to safeguard against any potential claims.