The recent case of Rice Shack Ltd v Miss D Obi considered whether an employee working under a zero-hours contract is entitled to pay during a 9-month suspension.
Facts
Miss Obi worked under a zero-hours contract from December 2015, and in March 2016 she was suspended without pay pending a disciplinary investigation into an altercation at work. Prior to her suspension she had been working an average of 15.5 hours per week. Following her suspension in March she wasn’t offered any shifts until December 2016, and no disciplinary hearing ever took place. The employee raised a grievance in May 2016 which included a complaint that her suspension had been without pay. She attended a grievance meeting in June.
Nothing further happened regarding the disciplinary investigation or her grievance, and she began a new full-time job elsewhere in August 2016 without telling the company. In December 2016 when Miss Obi was once again offered shifts, she responded by saying she was willing to return to work providing she was paid the outstanding sums due since her suspension in March. Miss Obi brought a claim to the employment tribunal for unauthorised deduction of wages.
Her claim succeeded and the employment tribunal held that she was entitled to be paid for the 40-week duration of her continued suspension until she had been offered further shifts.
The company appealed on the basis that the claimant had started full-time employment in August and that the employee would not have been able to fulfil the contract of employment.
Law
Unless a contract of employment contains a clear right to suspend without pay, any suspension must be paid. Under Section 13 of the Employment Rights Act 1996, employees have a right not to suffer unauthorised deductions from their wages. And in this case, both parties agreed that Miss Obi was an employee.Deductions from wages are not permitted unless they are required by law, authorised under the contract, or the employee has consented to them. “Deductions” includes situations where wages that were properly payable were not paid.
The employer argued that wages were not properly payable from August when Miss Obi had started other employment. Miss Obi argued that she had previously had college commitments but had accepted hours that fitted in with these.There was nothing in the contract that prevented her from having another job, and in legal terms exclusivity clauses in zero-hours contracts are unenforceable.
Decision
The company’s appeal was refused. Miss Obi had no obligation to disclose to the company her other employment. Zero-hours contracts are inherently flexible and this allows employees to take on other commitments and accept or decline shifts at their convenience.
Comment
Caroline Millar, a Trainee Solicitor in our Employment team commented:
“This case highlights the importance of dealing with disciplinary processes quickly, especially in cases where the employee involved is suspended. In most cases, suspended employees are entitled to be paid and when employees are on zero-hours contracts, other employment does not relieve employers of this obligation. Employers should always make it clear how long it is anticipated any suspension will last. Suspensions should be as short as possible and should not be used as a punishment but only when necessary.
“If an employee works under a zero-hours contract but they are no longer being offered shifts, it may be better to terminate the contract formally rather than let the contract roll on.”