Even if you do know the difference between zero and variable hours contracts, it seems that not all employers in the Channel Islands do.
There has been a lot of talk recently about the extent that zero-hours contracts are used, both locally and in the UK. The confusion and misunderstanding of one Jersey employer became apparent from a case that came before the Jersey Employment Tribunal in July 2013.
The Tribunal had to determine whether a contract that had been issued was a zerohours one or not. This point needed to be determined first because if a zero-hours contract existed, no employment relationship had been created. It would therefore follow that the Applicant's claim for constructive unfair dismissal would have been struck out at that stage.
A valid zero-hours contract removes the mutuality of obligation from the contractual arrangements. Work is offered and accepted on a casual basis with none of the benefits of a permanent arrangement for either party. The Tribunal considered the documentation which the employer produced and gave to the employee. The letter offering employment included reference to the following:
- It was a "basic requirement" for the employee "to work 2 days per week... normally a Wednesday and Thursday, but subject to change";
- A "fixed working day" comprised of 7.5 hours starting at 9 am and finishing at 5.30 pm;
- Periods of sickness would be unpaid;
- "The role is subject to a four-week probationary period... after successful completion of the probationary period you will be offered a permanent employment contract based upon a variable number of hours worked each week";
- A description of the further benefits that would be gained under the permanent employment contract including preferable purchasing terms for equipment; and
- "Finally let me welcome you aboard..." And, within the contract document:
- Nowhere did this state that it was a zerohours contract;
- It referred to a one month period of notice being required by either party;
- There was a requirement that leave should be booked in advance with management permission being obtained;
- It stated that the employee would not, without the agreement of the company, undertake employment of any nature (such permission would not be unreasonably withheld); and
- No fixed numbers of hours was guaranteed. The hours were variable but it was assumed that the company would provide a minimum of two complete working days each week.
All of the above was suggestive of a variable hours contract and unsurprisingly, this is what the employee believed to be the position.
However, prior to the employee being given the contract to sign, she was told that it was a zero-hours contract. Despite the difference of opinion, she signed the contract because she needed the work.
The rotas were done on a monthly basis and the employee worked five or six days a week. This continued until after she had complained about annual leave, bank holidays and some other points in the contract. Following this, the number of days that she worked reduced but she never worked less than two days each week. The employee felt that this amount of hours was guaranteed each week although she also accepted that the wording in the contract fell short of a complete guarantee. It was clearly the expectation of both parties.
The employee never declined any work that she was offered but told the Tribunal that she felt that she could have done if she so wished.
She was not aware if there was a sickness procedure in place but nonetheless she rang her line manager when she was sick because they had asked her to do so. She was also not aware if there was a procedure for taking holidays.
The Tribunal concluded that the contract that had been issued to the employee was a normal contract which had been adapted slightly to take into account the employee's variable hours and in the eyes of the employer, the employee was clearly a member of their team, albeit she only worked part time.
The employee was the only variable-hours employee that the employer had ever recruited and no advice was taken about the contract. This proved a costly oversight.
As some recent cases in the UK have shown, even if an employer has issued a contract which clearly states that it is a zero-hours contract, this wording alone is insufficient for the employer to rely on because Tribunals will closely examine how the relations work in practice. They will particularly consider the extent to which mutual obligations are placed on the parties, especially during the times when the worker is not actually working.
Following the recent unanimous vote by the Jersey government on the issue of the possible need for some legislation to be introduced in the island to "restrict any proven misuse of zero-hours contracts", the States of Jersey Statistics Unit has been tasked with the job of investigating the use of such casual contracts of employment and to produce a report of its findings. The Unit sends out surveys to businesses and households, so do not be surprised if you receive one to complete.
Where you have fluctuating demands, a zerohours contract may be appropriate, but if you have employees who either work a minimum number of hours each week/month, or work the same shifts on a regular basis, then it is likely that a variable hours contract is what they should be issued with.
Perhaps you already employ some staff and are uncertain as to whether the terms of the contract issued adequately reflect the working practice. If so, you should seek some advice about how to go about altering the contract to avoid this becoming a contentious issue subsequently.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.