Zero hour contracts

Over the last 6 years, zero-hour contracts have been up for debate by the government and have been on high alert through the media as they made up 6% of contracts issued in 2016. In summer 2017, Theresa May rejected the bill and allowed zero-hour contracts to continue. This then left most employers and employees with unanswered questions.

The recent ruling of case; Gary Smith Vs Pimlico Plumbers reached Supreme Court’s appeal and the outcome released in June 2018, The decision held that:

‘Self-employed’ plumber was in fact properly classified as a ‘worker’ with valuable employment rights under UK law (including discrimination protection and holiday pay). The case has been closely monitored because of its impact on organisations engaging large numbers of individuals on a self-employed basis’

The case decision was based on the fact that Gary Smith had worked for Pimlico plumbers for approximately six years and the outcome was based around key aspects of Smith’s working conditions which meant he cannot be classed as an independent self-employed contractor for employment law purposes.

Decisions on employment status will continue to be sensitive and the precedent that has been set by this case in the long run is not clear cut for employers. However, the publicity surrounding the decision is likely to lead to future challenges.

More broadly, this case is a reminder to all employers who are working with zero-hour contracts, that you need to be clear with employment status category set with your staff; e.g. employee, self-employed and dependent contractor (renaming worker). The main difference is the intention to provide clearer boundaries between the three categories in relation to how you as an employer are treating them and their service spent with you.

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