Keeping above the law this summer with seasonal employment

Tabytha Cunningham

For both agencies and employers in the leisure, hospitality and tourism sectors, the approach of summer brings with it the need for a temporary increase in the workforce to cope with the busy period. 

Meeting seasonal demand can be both a practical challenge and a risk.

Using a recruitment agency to supply seasonal workers is a great option for employers and can significantly reduce the administrative burden of finding and contracting appropriate staff.  As the agency is responsible for paying the worker, and dealing with deductions and rights such as holiday and sick pay, agency workers can provide companies with an easy path to additional labour, as and when required.

Businesses using agency workers are increasingly mindful that these workers are now entitled to access the same collective facilities and job vacancies as permanent employees from day one, and the same basic working and employment conditions (including pay) after 12 weeks. It is therefore important that recruitment companies demonstrate their expertise in ensuring compliance with these obligations and explain the information it will require about the basic working and employment conditions prior to the 12-week qualifying period.

Although agencies remain the most frequent port of call, employers are increasingly taking advantage of other options, which may decrease demand for agency workers. We set out below the different options, together with the issues that these raise for businesses, which recruitment agencies may find useful when discussing how they can best meet their clients’ needs.

Fixed-term contracts:

Fixed-term contracts are contracts of employment to cover a fixed period or task, for example the summer period. These can be useful to meet seasonal demand, providing certainty and helping to manage expectations on both sides, with a clear end date. 

However, recruiters should remind employers that fixed-term employees are legally entitled to the receive the same contractual benefits and facilities as permanent staff, and the contractual provisions, particularly regarding notice, need to be carefully considered in case of early termination of employment (e.g. for poor performance).

Zero-hours contracts:

Zero-hours contracts are exactly as the name suggests – there is no obligation on the company to offer, or the individual to accept, any work. These contracts can offer flexibility to both sides and allow employers to deal with fluctuating demand week to week.

Zero-hours contracts have been increasingly criticised by the media and MPs for allegedly allowing organisations to avoid employment legislation. Employers should be wary of arguments that individuals on zero-hours contracts may be entitled to full employment rights and, again, need to ensure that contracts are carefully worded to minimise the risk that such individuals are seen as employees.

Existing workforce:

For some employers, the extra labour required may simply be covered by the existing workforce, through increasing overtime or offering weekend and evening shifts.

This is, however, reliant on employers having appropriate overtime clauses in employees’ contracts and can clause complications administratively, for example with holiday pay calculations. Of course, using the existing workforce is not possible for all employers, and may detrimentally affect employee morale.

Other issues to consider

Whatever arrangements are put in place, the following key areas should be considered:

• Employment status: Most seasonal workers will be classed as ‘workers’ rather than ‘employees’ and therefore have more limited rights. For example, although workers are entitled to the National Minimum Wage and holiday pay, they are not protected from being unfairly dismissed. Employers and recruiters should watch out for regular patterns and factors that may point towards employment.
• Pension rights: Seasonal workers may be entitled to be automatically enrolled in a qualifying pension scheme, provided they meet the applicable criteria. Where workers are supplied by a recruitment agency, the obligation to automatically enrol workers will fall on that recruitment company.
• Holiday pay: When engaging seasonal workers, there may be a temptation to roll up holiday pay, by including it in their hourly rate. However, this practice is unlawful. Individuals should instead be able to take holiday when requested or receive a payment in lieu of the untaken annual leave when their engagement comes to an end.
• Working time: All reasonable steps should be taken to ensure that workers are not working in excess of the 48-hour limit on working time. Businesses should look out for individuals working in a number of seasonal roles to ensure that the combined roles do not exceed the limit, unless the individual has signed an opt-out agreement.
• Filling roles: A topical issue for recruiters is the struggle to find candidates to fill roles. As the summer holiday approaches, recruiters should consider contacting local universities and sixth-form colleges to advertise seasonal work to students and educational staff, who may be available over the summer period.

Tabytha Cunningham is Associate Solicitor at Coffin Mew Solicitors