Zero Hour Contract Multimillion Pound Claim

18th February 2015

It is understood that the retailer, Sports Direct, is facing claims worth potentially millions of pounds from 200 workers who were and are employed on zero-hours contracts.

The basis of the claim is that the workers were omitted from the Company's bonus scheme, due to the fact that they were employed on zero-hours contracts. It is thought that each individual claim is currently averaging at about £36,000 each, but the highest could amount to £100,000, representing a real financial risk to the Company given that they employ thousands of works on zero hours contracts.

It is not clear yet whether the Company will try to reach an agreement with the employees regarding the potential liabilities, but if they do not, the claims could progress to the Employment Tribunal to decide on liability.

The basis of the claims is that they challenge the legality of the Company's treatment of its part-time workforce and, in particular, the difference in treatment between those placed on zero hours contracts and full-time staff.

For employers, the case highlights the difficulties and potential pitfalls when using zero hours contracts in the workplace. In particular, employers should be careful where they engage with individuals under zero hour contracts and deny them rights to benefits such as bonuses, commission, sick pay or holidays. It is always recommended that contracts with zero hours workers are clear in this respect and are reviewed regularly. The use of zero hours contracts are highly controversial and the government is intending to introduce legislation banning the use of exclusivity clauses in such agreements.

For more information, please contact Simon Bond, Associate on 0845 111 5050.


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