Right to Average Pay Whilst Suspended

Hello and welcome back to your monthly employment law update. Last month’s update had features on the World Cup, dress code & religious discrimination guidance and prisoners plugging the post-Brexit labour shortage. Meanwhile, last week’s case law update had two cases on trade union issues.

We have a comprehensive update this month with some rather heavy topics, so, to start things off gently, how about an employment law-themed joke? Did you hear about the clown who was sacked from the circus? He’s suing for funfair dismissal….

Terrible jokes out of the way, our first feature is some case law about zero-hours contracts and disciplinary procedures. In Rice Shack Ltd v Obi the question was: Is a zero-hours contract employee entitled to pay whilst they are suspended and thus not working any hours?

Ms Obi, the Claimant, was a student on a zero hours contract with Rice Shack, the Respondent. Whilst the Claimant was not guaranteed hours, she usually worked around 15 hours a week.

She was suspended by the Respondent but no disciplinary was organised. As she was on a zero hours contract the Claimant was not offered work and thus was not paid for the duration of her suspension – which lasted 9 months! She submitted a grievance about her unresolved suspension and lack of suspension pay but this was not investigated or responded to.

Five months into her suspension, the Claimant found employment elsewhere, she initiated ET proceedings for unpaid suspension monies. After the claim was lodged, the Respondent offered the Claimant a shift. She replied saying she was happy to accept work provided her outstanding money was paid.

The ET accepted the claim. As the Claimant was on a zero-hours contract she was entitled to average pay for the duration of her suspension, in this case, 15 hours a week for 9 months. This applied the same principle that a defined-hours employee is entitled to full pay for the duration of their suspension.

The Respondent appealed, they believed the Claimant was only entitled to pay up until she took other employment. The EAT rejected the appeal. zero hours contracts cannot be exclusive and thus the Claimant was entitled to average pay from the date of suspension to the date the Respondent next offered her a shift and thus lifted the suspension.

The takeaway point:

Suspending a zero hours employee indefinitely will not be a means to avoid dismissal. – which was probably the case here. Therefore, you should treat zero-hours staff disciplinary issues the same as regular staff. Without a definite conclusion to the suspension, zero hours staff will be entitled to average pay for the duration of the suspension.