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Nil Hours Contracts

There has been some considerable doubt about whether a casual worker employed from time to time to carry out particular work, but who may not be offered any work under the contract ('a nil hours contract'), is an employee of the company with whom he has the arrangement. In these particular contracts the employer is never obliged to provide any work, and, equally, if work is offered, then the employee is under no obligation to take up the offer.

At first, it appeared that there was no such relationship. Then the case of Carmichael and another v National Power plc found its way to the Court of Appeal (reported in the Times 1998 2nd of April) when the Court decided that the arrangement did constitute a contract of employment, and, accordingly, that the employees were entitled to many of the rights given to workers under the Employment Rights Act. In particular in this case, the first right, that to have the tribunal declare their terms and conditions was at stake.

Then in November 1999, the case at last came before the House of Lords, who re-instated the first instance decision

In this particular case, the Court of Appeal had found that there had been clear words indicating that the employer had agreed to offer a reasonable amount of work, and, similarly, that the employee had accepted an obligation to accept a reasonable proportion of the work offered to him. The House of Lords, whose words matter, disagreed.

These elements may very well not be present in all such situations, and, once again, the weakness of one employer may be used by those fortunate enough to follow, to make sure that the documentation surrounding employment arrangements sets out precisely the intentions of the various parties.

Important: Please note that our law-bytes are retained for archival purposes only. The law changes, and these notes are often, now, out of date. You must take direct advice on your own personal situation and the law as it currently stands.
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18 October 2013 http://www.swarb.co.uk/lawb/empNilHours.shtml 163 18 October 2013