In this article, we cover some of the issues student workers may face. These also apply to employers who may employ students or temporary workers.
Whether it is to pay their way through University or to supplement the income provided by student loans and parents, many students look to take on a job during University. Many work part-time in leisure and retail roles due to the flexibility that these sectors provide in terms of hours, enabling students to successfully combine work, study and social lives. A recent report has estimated that as many as 41% of waiting staff and 25% of bar staff are full time students.
For this reason, many students are engaged on zero hours contracts, which have been a hot topic for politicians recently due to their perceived unfairness to workers. There is some confusion about what is meant by the term ‘zero hours contract.’ The general position is that a zero hours contract involves a situation where there is an agreement between two parties that an individual may be asked to perform work for a company, but there are no minimum set contracted hours.
Aside from this, the terms of such arrangements differ. Some zero hours contracts allow the employee to reject work when it is offered, whereas some place obligations on workers to accept work when it is offered to them, effectively requiring workers to be available for work at all times, despite the fact that there is no obligation on the employer to offer the work. Sometimes, zero hours contracts will include an ‘exclusivity clause’, preventing the worker from being permitted to work for any other company.
Zero hours contracts can be a very useful tool for employers, enabling them to vary the size of the labour force to cater for variable demand. Zero hours workers can also provide useful cover for sickness, holiday and other absences. Research shows that despite the recent controversy, plenty of workers are happy to work on zero hours contracts, and for many students, this works very well to allow them to fit work around their studies.
The difficulties arise where zero hours contracts are abused by unscrupulous employers, requiring employees to effectively be available for work at all times without providing any guarantee that work will be offered, leaving workers in the position whereby they are unable to meet their financial obligations, but are unable to seek or accept work elsewhere.
The Government is currently reviewing the use of zero hours contracts, with a view to introducing legislation to try and prevent their abuse by employers. The Small Business, Enterprise and Employment Bill is proposing to ban the use of exclusivity clauses. If companies were to include such provisions in a zero hours contract, this contract would be unenforceable against the worker. Drafting such legislation will be very difficult, and on the basis of the current suggestions, the definition of ‘zero hours contract’ could be circumvented by providing a guarantee of as little as 1 hours’ work per month in the contract.
A further difficulty here is that even if exclusivity clauses were to be banned, the proposed legislation provides very little recourse for a worker whose employer declines to use the worker’s services ever again if shifts are turned down because the worker has another job. The Government is currently undergoing a consultation on the proposed wording to try and identify the loopholes and anti-avoidance measures. There seems little doubt that we can expect legislation of some kind to be introduced in due course, but it is unclear what form this legislation will take.
A second development of interest to both employers and employees is the recent changes in the law regarding holiday pay. These changes are likely to significantly affect industries which pay commission, overtime or other supplements to employees. As students are often employed in roles such as telesales and seasonal retail work, which often pay a low basic salary with commission/overtime on top of this, it is clear that many students and their employers will be affected by this change.
The change has arisen following a series of recent judgments from the Court of Justice of the European Union relating to the way in which holiday pay is payable to employees. In summary, the Court decided that where a worker receives commission as part of their usual salary, this should be taken into account in calculating the amount of holiday pay due to a worker. The rationale for this decision is that employees who receive low basic pay plus other supplements may be discouraged from taking holiday due to the fact that they will receive less pay than if they had remained at work. Further cases have also clarified that overtime payments should be included in the calculation of holiday pay, and it is likely that the principle will be extended further to cover other supplements.
It is estimated that holiday pay has been significantly under-calculated by many employers, and as a result, many employers could now face claims for underpayment of holiday pay, which could go back a number of years. This development could therefore have potentially significant consequences, both for companies employing students, and for employers more generally.
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