Yahoo Finance Cineworld's zero-hours staff face no pay as it confirms UK shutdown
Cineworld workers on zero-hours contracts in the UK could be left without pay beyond Thursday after the cinema chain confirmed it will temporarily close its 127 sites in Britain this week, putting 5,500 jobs at risk.
The UK’s largest cinema operator declined to say how many of its staff are on zero-hour contracts – which do not guarantee any hours of work – but Cineworld workers contacted by the Guardian said that the majority of employees at the average Cineworld site are employed on zero-hour terms.
What is a zero-hours contract?
There’s no legal definition of a zero-hours contract, but what is usually meant is a contract between an employer and an employee where no hours are guaranteed. Sometimes the term is used to refer to contracts where a small number of hours are written in but the terms are flexible – the employer might call you in on the day for more work or tell you that you are not needed. You are only paid for the hours you work, and you should be allowed to work for another employer during the rest of the time.
Zero-hours contracts are common in the hospitality industry where business may be seasonal or unpredictable. They are also used in the care sector where the number of clients to be looked after can vary from day to day. Over the past decade the number of people on zero-hours contracts has risen hugely. Official figures show that between April and June this year more than 1 million people were on one.
What are your rights if you are made unemployed?
This will depend on whether you are classed as a worker or an employee. If you’re a worker, you won’t be due any redundancy pay. The distinction is difficult, and some people have had to go to court to prove they are employees rather than workers. If you are not allowed to turn down work that you are offered and you are expected to work a similar pattern each week, you are probably an employee.
If you are an employee, you are entitled to statutory redundancy pay as long as you have been working for the company for two years or more. You should be paid for any holidays you have accrued and not used.
“Usually in the case of zero-hours contracts the individual will be considered a worker,” says Matt Gingell, an employment lawyer. “Of course each situation will depend on the wording of the contract and what is happening in practice.”
Tom Neil, a senior adviser at the organisation Acas, says anyone who has started a new job since April should have been given a written statement saying what their status is.
“However, whether they are a worker or employee will also depend on the reality of the situation. So, even if written down it says they are a worker, if the reality of their role and their responsibilities is more akin to an employee then that would take precedence.”
How much will you get paid?
If you are an employee and have been working for the employer for at least two years, you will be entitled to statutory redundancy pay at the minimum. This is based on your age and weekly earnings. When your pay is not the same each week, your employer will normally base what it offers on an average calculated over the past 12 weeks. If you have been on furlough, the calculation should not be based on your earnings during that period but your pay during normal times.
The sum you are paid will be half a week’s pay for every full year you worked and were under 22; one week’s pay for every full year you worked and were aged 22-41; and one-and-a-half week’s pay for every full year aged over 41.
Are you eligible for the job support scheme?
Staff on zero-hours contracts were eligible for furlough and do qualify for the chancellor’s job support scheme, which starts on 1 November. This lets employers claim support for people who are only employed part-time as a result of the pandemic, but also requires payments towards the hours they are not working. Given that zero-hours contracts offer employers the opportunity to call people in only when they need them, there seems to be no incentive for them to use the job support scheme.
Cineworld employees first found out that their jobs were under threat via media reports on Saturday evening. On Monday afternoon employees had not received communication about their pay for the next month, according to workers who asked to remain anonymous because the terms of redundancy had not been settled.
Cineworld’s cinemas are generally run by a small team of salaried managers and a larger group of workers whose contracts give them no guaranteed hours of work.
Employers must give employees with less than two years’ service a week of notice – or more according to their contracts. But they do not have to give those on zero-hour contracts any hours during the notice period. That means that workers with less than two years’ service – including many of the students and young people who make up much of the Cineworld workforce – may not be entitled to redundancy pay.
Workers told the Guardian they had been treated as “expendable” by the company, and said they had not been consulted about their futures.
“My plan is probably to look for other manager jobs,” said one worker at a cinema in the Midlands. “If not I know Amazon are always hiring. It’s probably going to be a minimum wage job.”
A Cineworld spokesman said the company has asked the government to extend the furlough scheme, which subsidises wages for temporarily laid off workers, beyond its official closing date of 31 October. “We are currently assessing options for each of our employees. In addition, we have approached the government with a request to re-instate the furlough scheme to support our employees as well as all other employees in this industry, as there is no doubt that the whole sector is in a uniquely complex and vulnerable position.”
Speaking on Monday, Boris Johnson urged people to go to their local cinema. Saying that cinemas had devised way of making screenings covid-secure, he added: “I’d encourage people to go out to the cinema, enjoy themselves and support those businesses.”
Mooky Greidinger, the Cineworld chief executive, whose family trust owns a fifth of the company shares, said on Monday that the successor to the furlough scheme – the job support scheme – “cannot work for us” because it did not help companies earning no income. The comments were contained in a memo sent to employees seen by the Guardian.
The job support scheme is a central plank in Rishi Sunak’s plan for the UK economy as the furlough scheme comes to an end. Under the scheme the government will support a maximum of only 22% of the salaries of workers on reduced hours – significantly less generous than the 80% offered at the start of its predecessor. The new scheme has been criticised by some economists and opposition MPs for not incentivising job retention.
A Treasury spokesperson said: “Unfortunately, we will not be able to save every job during this difficult period – but continue to do all we can to support businesses, protect livelihoods and extend opportunity across the country. Our Job Support Scheme has been advocated by business and is designed to protect jobs in firms facing lower demand over the winter.”
Related: Time to die? British cinemas fear ruin without latest James Bond film
Cineworld on Monday confirmed it would close its 127 UK cinemas after distributors for the James Bond spy franchise delayed the release of the latest instalment, depriving the industry of another potential blockbuster. The chain will also shut more than 500 US cinemas, and a total of 45,000 UK and US workers are expected to be made redundant once contractors, such as cleaners and security guards are included. It is understood workers may be encouraged to reapply for jobs once the cinemas reopen, but there is no clear timeline for that to happen.
In the staff memo, Greidinger wrote: “The UK government announced a new job support scheme last week and as you know, the aim of this is to support viable jobs. This said, the new government scheme places a greater financial burden on employers, which cannot work for us when we have almost no income.”
