Zero hour workers entitled to suspension pay even if they find a new job

The Law

An employer should pay an employee during a disciplinary suspension unless it has a clear contractual right to suspend without pay. If an employee is not paid during a period of suspension they may bring a claim for unauthorised deduction from wages.

A zero-hours contract is a contract in which the business does not guarantee a particular number of hours work and the worker is not committed to accepting particular hours.  A worker on a zero-hours contract cannot be prevented from obtaining other work whilst working under this type of contract.

The Facts

Ms Obi, the Claimant, was a student on a zero hours contract with Rice Shack. She worked as a front of house assistant in a food outlet. Whilst the Claimant was not guaranteed hours, she usually worked around 15 hours a week and fitted this in around her college commitments. 

In March 2016 a possible disciplinary issue arose and Rice Shack suspended the Claimant pending an investigation into an altercation.  No disciplinary hearing was ever organised.

There was no provision in her contract to allow suspension without pay but Rice Shack did not pay her.  No shifts were offered to her between 7 March 2016 and 13 December 2016.

On 23 May 2016 the Claimant submitted a written grievance raising various complaints, including that she had been suspended without pay and had not been offered work, even though she was willing to work.  A grievance meeting was held but this matter was never resolved.

On 22 August 2016 the Claimant started full-time work with a call centre company and she did not inform Rice Shack of this work.

On 13 December 2016 the Claimant was offered further shifts which she turned down as she no longer wished to work for Rice Shack.

Employment Tribunal (“ET”) Decision

The ET heard the case in February 2017. They concluded that the contract end date was December 2016 when Rice Shack offered the Claimant shifts and she turned them down.  The ET awarded the Claimant 40 weeks of average wages (from March to December 2016) for her unlawful suspension without pay.

The ET held that the Claimant’s suspension had continued because Rice Shack had failed to contact the Claimant regarding the outstanding disciplinary process.

Rice Shack appealed against the ET decision arguing that the Claimant had started full time employment elsewhere on 22 August 2016 and not disclosed this to Rice Shack. Rice Shack argued they should only be liable for wages up to this point. 

EAT Decision

The EAT rejected the appeal. Zero hours contracts cannot be exclusive and under the terms of Ms Obi's contract, she had been entitled to accept other employment. She had been under no obligation to notify her employer of this.

In addition there was no contractual right to suspend without pay and Rice Shack could not point to any of the Claimant’s conduct which would have entitled them to have summarily dismissed her.  The Claimant was therefore entitled to be paid for the period of the disciplinary suspension.

It should be noted that in this case the Claimant was taken to be an employee.  Zero hours contract staff may, depending on the facts, be workers as opposed to employees.  If the Claimant was a worker the outcome of this case is likely to have been much different.

What does this mean for you or your business?

• Be aware that employees on zero-hours contracts have no obligation to inform you if they also work for other employers.
  
  
• It is not a breach of contract for an employee on a zero-hours contract to seek alternative work during a disciplinary suspension period.
  
  
• Suspending a zero-hours employee indefinitely will not be a means to avoid dismissal. 
  
  
• You should treat zero-hours employees' disciplinary issues in the same way as regular employees. 
  
  
• Without a definite conclusion to a suspension, zero-hours employees will be entitled to average pay for the duration of that suspension.

What do you need to be doing now?

• Make sure that any disciplinary processes don’t drift for zero-hours employees.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.