'Zero Hour' Contracts

A recent employment case has highlighted the importance of establishing the reality of an employment situation rather than relying on what is set out in the written employment contract. Carers who were employed to provide assistance for a physically disabled individual under a ‘zero hours’ contract claimed to have protection under TUPE when the contract was re-tendered.

The carers claimed:

1. they could not be dismissed before or after the transfer, simply because of its occurrence; and
2. the key terms and conditions of their contracts should not be made worse because of the transfer.

To be eligible for these rights, they needed to show that they were ‘employees’, as defined under the Employments Rights Act 1996.

At the Employment Tribunal the judge held that the ‘mutuality of obligation’ between the previous care employer and the carers meant that they could be classed as employees and as such had TUPE protection. The judgment in describing the carers found:

"(the carers were)…subject to control and discipline; they had to provide personal services; they were provided with uniforms and
equipment; they were paid on a PAYE basis; they had all worked regularly over a number of years and had only taken time off for holidays, sickness and when suspended for which they received payment; it was not established that there were gaps in the continuity of employment. The claimants required regular work and this was provided by the first respondent."

The current care employer appealed against the tribunal judgement.

However, the carers stated:

• they had worked fixed hours;
• there was mutuality of obligation between the previous care employer and themselves;
• the previous care employer had relied on them to take up their shiftsto provide specialist medical care ifrequired; and,
• two of the carers would not havetaken up the contract had they notbeen offered fixed working hours.

Consequently the judge upheld the decision of the Employment Tribunal. In his judgment he referred to an earlier case where carers, although working on a zero hours contract, were reliant on the care provision employer for their accommodation and for other assistance due to their limited English. In this earlier case the judge stated:

"Of course, it is important that the industrial tribunal should be alert in this area of the law to look at the reality of any obligations. If the obligation is a sham, it will want to say so."

Although each case will be considered on its own facts, it is important to stress that the reality of the relationship will be carefully assessed if there is an issue as to its true nature. It is a useful reminder for employers to periodically review the written contracts with those working for them to ensure those contracts accurately reflect the reality of the relationship.