Zeroing hours in the downturn

[Justin Bellinger]

From a recent discussion with a friend, he told me that he had recently had his hours reduced to zero, but not been made redundant from his role.

In effect, this has forced him to look for work elsewhere, without providing him with a redundancy payment. He previously had a full-time contract, but, as with most contracts, it was changeable by his employer on two weeks notice.

I find this unethical, even if borderline legal.

What do you all think of this, and how would you deal with it differently?

Justin.

[yadu tekale]

i am not an expert on employment law but have gone through the unfortunate process of letting staff go. in my opinion there is no such thing as a zero hour contract. that is the same as redundancy and the employer is liable to pay redundancy.

i assume the employment is governed by EU law?

again i am not an expert on this so my opinion could be wrong.

[James Avery (@averyj)]

I am not sure where you live but in the US a contractor/consultant has no rights to unemployment. The company can terminate the contract or reduce it to 0 hours and have no liabilities. This is why when I talk to people I tell them it is their responsibility to have savings in case that happens, it sounds like this is true wherever you live.

[David Locke]

Seems to me that your fiend needs to talk with the unemployment people or a lawyer.

He may be keeping his benefits, but if he was exempt, then he doesn't work by any hourly standard, and cutting his hours to zero wouldn't mean that he wouldn't get paid.

[Justin Bellinger]

Thanks for all of your input on this.

My friend is from the US, and held a management position that was not on a contractor basis.

I guess you are right, a lawyer is needed.

Thanks again.

[David Locke]

James Avery (@averyj) said:

I am not sure where you live but in the US a contractor/consultant has no rights to unemployment. The company can terminate the contract or reduce it to 0 hours and have no liabilities. This is why when I talk to people I tell them it is their responsibility to have savings in case that happens, it sounds like this is true wherever you live.

Actually, contractors hired via bodyshops paid on a W2 basis do get unemployment even if fired. State unemployment agencies do not go to the client. They go to the employer, the bodyshop. However, if the client doesn't fire the contractor correctly, that employer can find themselves getting a tax bill from the IRS for a section 22 violation. Do not treat your contractors like employees. You cannot legally remediate them, or expect them to sign ANY agreement with you, unless you want to pay them cash equivalent to the benefits that they would have received as an employee.

This includes IP agreements. If you need an IP agreement, you make one with the bodyshop, and the bodyshop makes one with the consultant.