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23rd August 2016

Sports Direct is in the news again with papers being filed at the high court claiming the company breached employment regulations by placing staff on zero hours contracts. The Guardian reports that members of staff returning from maternity leave or transferring from a company bought by Sports Direct were put on zero hours contracts, causing them to miss out on a generous bonus scheme.

A consultant with ELAS specialising in employment law, says that if the claims made in the lawsuit are true then it appears as if the company is in breach of multiple regulations including discrimination laws and TUPE, the Transfer of Undertakings (Protection of Employment) Regulations 2006.

They say: “When a business transfers to another business then TUPE applies in nearly all instances. TUPE states that it is not lawful to dismiss employees or change their T’s & C’s of employment simply because they have been transferred to a new employer. The new company would need to demonstrate clear and legal business reasons in order to dismiss or make any changes to the terms of employment.”

They continue: “Clear, demonstrable and legal business reasons must be of an economical, technical or organisational reason. Uniformity alone is not a legitimate reason e.g. you cannot justify changing everyone’s terms because they are better than what you currently offer your staff. The consequences of doing so can include automatic unfair dismissal and changes being unenforceable. Any employer is going to seriously struggle to justify changing all employees to zero-hour contracts from fixed/minimum hours – this will almost certainly produce claims for automatic unfair dismissal subject to the usual time limits of bringing claims as we are seeing in this case.”

Likewise, women who are returning from maternity leave have the right to return to the same role as they were in before commencing leave, unless this is not reasonably practicable. Our consultant says: “’Reasonably practicable’ in this instance is a high hurdle to get over – the maternity cover being better for example is not a good enough reason. If the role continues to exist then the employee has the right to return to it. It’s not lawful to switch someone from fixed/minimum hours to zero hours simply because they have taken maternity leave and the consequence of doing so is a discrimination claim which can bring about unlimited compensation – the UK record is currently £4.5m but typically employers could expect to pay out upward of £10k.”

Zero hours contracts can be a useful tool for employees and employers if they are used properly. When the zero hour contracts are not genuine then they will not be enforceable and custom and practice can overrule what is in the written contract, for example, working Monday to Friday 9am-5pm for 10 years will overrule a zero-hours clause that has never been used.


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