A college student working for a restaurant on a zero-hours contract is owed more than £4,000 in unpaid wages, despite starting a new full-time job midway through a nine month suspension from her job role, the Employment Appeal Tribunal (EAT) has decided.
Miss Obi joined Rice Shack on a zero hours contract in 2015. At the time, Miss Obi was studying and the flexibility of the contract fitted in around her college commitments. Obi would earn, on average, £102.50 a week based on working 15.5 hours. Miss Obi’s contract with the restaurant also meant she could take on work elsewhere, as she was not tied down as one of their employees.
Rice Shack also couldn’t be certain that Obi would decline shifts after starting her new job because it offered her no work for almost another four months, the EAT stated.
Obi was suspended in March 2016, following an altercation at work. Rice Shack said it would begin a disciplinary investigation and subsequently suspended her. This is despite Miss Obi’s contract not having a provision for being able to suspend her from work without pay. A disciplinary hearing was then supposed to take place but it was never arranged and the matter diminished gradually.
Obi then submitted a written grievance in May 2016, which included a complaint that she had not been paid during her suspension. A grievance hearing took place in June, although Obi had to then chase for the minutes from the meeting.
Obi then took action in July 2016 and lodged an employment tribunal claim for unauthorised deductions and in September she was asked to provide evidence of her losses. Even though Obi’s call centre job paid her more than her job at Rice Shack, she provided no details of loss mitigation. Rice Shack became aware of Obi’s new job at the call centre at the beginning of January 2017.
On 22nd August, Obi started working full-time at a call centre but did not disclose this to Rice Shack. The restaurant contacted Obi on 13th December 2016 to offer her some shifts. Obi responded three days later to say she would like to return to work, but requested that she should be paid for the duration of her suspension. Obi also reminded the restaurant that she was still waiting for the outcome of her grievance.
The tribunal hearing went ahead in February. Rice Shack agreed that Obi should be paid her average wages however, they argued that she should only be paid until August when she started working full-time at the call centre. However, the restaurant accepted they shouldn’t have suspended her without pay.
Manchester Employment Tribunal disagreed with Rice Shack and declared that she should be paid her average wages for the full duration of her suspension period, which totalled to £4,087.
The EAT upheld the tribunal’s decision. Judge Eady stated “Ultimately, the problem [Rice Shack] has identified in this case is entirely one of its own making”.
According to the statistics collated by ONS regarding zero hour contracts, 1.8 million people worked on a zero-hour contract which is an increase from 1.7 million for the year before.
A key factor in employers hiring individuals on zero hour contracts is the flexibility accorded to the employer and individual – the employer does not have to offer work and the individual can choose to decline work. They therefore appeal to individuals who want to work in this flexible way and for employers they can be used if work suddenly fluctuates. However, the risk with zero hour contracts for an individual is that there is no guarantee of work and they are not classed as an employee. Employers should ensure that the arrangement works for them as equally as it does for the individual.
If you need any support on zero-hour contracts or determining the employment status of an individual in your business, please contact a member of the HPC team:
T: 0844 800 5932