Employment Law Cases

Rice Shack Ltd v Obi

Is a zero-hours contract employee entitled to pay whilst they are suspended and thus not working any hours?

Background

Ms Obi worked for Rice Shack under a zero-hours contract, fitting in her relatively regular hours around her college studies. In March 2016, she was suspended pending an investigation into an altercation at work. There was no provision in her contract to allow suspension without pay. She received no pay. She raised a grievance in May 2016 about her continued suspension and failure to be paid but this wasn’t investigated or responded to. No shifts were allocated to her from March 2016 until December 2016 when she was again offered shifts, and the disciplinary was not progressed. In July 2016, Ms Obi brought claims for unauthorised deductions from wages. She obtained another full-time job in August 2016, but did not tell her employer, and was not obliged to do so under the terms of her contract.

A tribunal held that the end date of the contract was December 2016 when Rice Shack had offered shifts and Ms Obi had turned them down because she no longer wished to work for them. The tribunal awarded her 40 weeks of average wages (from March to December 2016) for the unlawful suspension without pay. Rice Shack appealed.

EAT decision

Rice Shack accepted liability for unpaid wages from the start of Ms Obi’s suspension until August when she found another job. But it disputed liability from August until December.

The EAT didn’t agree. Ms Obi’s contract was a zero-hours contract, and there was nothing prohibiting her from obtaining alternative work. Many of Rice Shack’s staff had other jobs. Just as Ms Obi had previously worked shifts around her college studies, she may too have accepted shifts around her new job. Taking alternative work did not breach her contract.

The reason why Ms Obi’s claim succeeded was, said the EAT, Rice Shack’s ‘unforced error’ in continuing the disciplinary suspension without resolution. She was therefore entitled to her average pay from March to December.

Link to judgment: http://www.bailii.org/uk/cases/UKEAT/2018/0240_17_0203.html

Comment

The lesson to take from this decision is don’t let disciplinary matters drift. Also, just because a suspended employee works under a zero-hours contract doesn’t mean they can be suspended on no pay (absent a contractual right to do so). And even with a contractual right to suspend on no pay, you would be advised to keep any period of suspension as short as possible and under review. The employer’s mistake here was to suspend and then not deal with the matter – this applies as much to a full-time, permanent employee as to one on a zero-hours contract.