Zero-hours workers are generally considered to be at risk of exploitation. The lack of government oversight regarding the working conditions of these workers makes them vulnerable for exploitation.
Contrary to the general conception, zero-hour workers do have statutory rights. They have ‘worker’ status as per the UK labour legislation. This entitles them to all the employee privileges including statutory breaks, holiday pay, and national minimum wage.
Another misconception regarding zero-hour contract workers is that there are no statutory guaranteed hours for them.
Under the Employment Rights Act 1996 (ERA), all workers are also entitled to paid annual leave at the rate calculated as per the complicated ‘week’s pay rules’.
Various high-profile cases such as Dudley Metropolitan Council v Willetts and Williams v British Airways show that the paid annual leave is applicable even when the working hours is not guaranteed.
Calculation of Minimum Annual Leave
As per the Worker Time Regulations 1998 (WTR), every worker irrespective of their employment status is entitled to a minimum annual leave of 5.6 weeks. Application of this law to zero-hour workers is difficult since they don’t work a fixed number of weeks in a year.
Under the WTR, workers must be paid according to the weekly pay in the preceding 12 weeks before the holiday. Although, this sounds simple, actually implementing the calculation is not that
As a rule of thumb, businesses generally use the 12.07 percent formula in calculating the holiday amount due. The accrual rate is derived from the fact that the for workers the actual working year is 46.4 weeks, and not 52 weeks. This is because 5.6 weeks minimum annual leave is deducted from total weeks. And, 5.6 weeks is 12.07 percent of 46.4. This method is also recommended by the Holidays and Holiday Pay ACAS Guidance.
However, remember that the rate of 12.07 percent does not apply in all cases. This year a tribunal case Brazel v Harpur Trust had found that holiday pay based on 12.07 percent is not appropriate for a term-time, variable hour worker. The important thing is that the pay should be based on the actual number of hours worked by the zero-hour worker.
Summing it All Up
employers need to review the number of hours worked by the zero-hour contractor to avoid any potential claims. Also, they should not assume that contract workers don’t have any statutory privileges. This is important to avoid any court troubles that could cause embarrassments and not to mention will be costly for the firm.