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When do zero hours workers become employees and may be entitled to a redundancy payment?

HI All

I wondered if anyone had come across issues with employee status for zero hours workers?

I've been asked to look at a problem in a company where they want to confirm if they need to pay redundancy to an individual who is on a zero hours terms of working.  I've looked at the most recent terms issued to that person (revised terms in 2013), and it clearly states there is no guarantee of work for the individual.  However, they have been working for the company for 12 years (!), have a job title, have been sent the staff handbook, notice period provisions, and that they will follow the company's disciplinary and grievance procedures.  The individual is now 67, there is a provision in the terms with regards to retirement age and being able to work beyond that if agreed with the company.

They are looking at a potential redundancy situation for all of their staff as the business is closing, and want to check if he would be entitled to a redundancy payment. My view would be that he is, as he has been working regular hours for the company plus his terms would indicate that he is really an employee.  

I wondered if anyone had any advice they could share, or had come across something similar?  

Many thanks

Nicola

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  • Yes, it sounds like he's definitely an employee and entitled to redundancy. BTW, review your contracts - what is a retirement age doing in them?!
  • Hi Nicola

    Employment status of those on zero hours contracts is not at all clear, but if this person has been paid for work done most weeks, then why not avoid possible legal challenge and err on the side of generosity?

    Weekly earnings will be an average of the 12 weeks prior to the 'relevant date. If they earned nothing in any of the 12 weeks being averaged, take the 12 most recent when they did and there you have a weeks pay, if needs be subject to the current earnings cap.
  • In reply to Annabel:

    Thanks Annabel, this is a company I've just been asked to look at as they are a new client of ours. The terms that were issued back in 2013 look very muddled, as I cannot see that it really is a Zero Hours contract, as all other parts of the terms would infer the individual is an employee. Hence my asking. Thank you for your help.
  • In reply to David:

    Hi David

    Thank you for your help, much appreciated.