More than 300 jobs are expected to go at Evans Cycles, and hundreds of remaining store staff are to be switched to zero-hours contracts, as Mike Ashley’s Frasers Group aims to slash costs.
The 55-store bicycle retailer, which Frasers bought out of administration in 2018 when it had 62 outlets, has told staff it intends to cut up to half of the workforce in many stores despite booming trade for bike retailers during the pandemic.
Sales of bikes have soared as people have sought an alternative to public transport and a leisure activity suitable for lockdown life.
A document sent out to Evans staff says management will also have to work more hours. They will move from 40-hour contracts to 45 hours, but all other store staff will be switched from fixed-hours contracts, which usually guarantee at least eight hours a week, to what it calls “casual worker agreements” – Frasers’ term for zero-hours contracts.
It said the group would employ about 475 staff in stores, down from 813 in the latest figures filed at Companies House.
A note to staff said: “We cannot rely on old ways of running our business and we must adapt. These changes will look to address the cost of sales ratio in our stores and ensure that we are able to be more flexible with our cost base out of peak trading and during difficult trading periods.”
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 started on 1 November 2020. 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.
One store worker told the Guardian that the job cuts came on top of “very difficult working conditions” during the pandemic.
The employee said that all store workers had been told they must reapply for their jobs in the coming weeks. “This last year has been awful since [Frasers] started changing things. It’s been one indignity after another.”
The switch to zero-hours contracts brings Evans into line with other Frasers outlets including Sports Direct shops and Flannels, where staff are not guaranteed regular work despite the high prices on its designer clothing.
Five years ago, Ashley’s retail group, then known as Sports Direct, pledged to ditch zero-hours contracts after heavy criticism from unions and MPs.
Ashley, the billionaire owner of Newcastle United, apologised to staff and promised to turn the business into “one of the best employers in Britain”.
A year later, the then chairman Keith Hellawell said the group would continue using the contracts claiming “a huge proportion of workers are happy to retain the flexibility”.
A spokesperson for the shopworkers’ union Usdaw called on the government to ban zero-hours contracts: “It is not acceptable for workers to be put on contracts that don’t guarantee them any hours at all. There is a real danger that, as the impact of coronavirus begins to show on the economy, more workers will feel forced to take zero-hours contracts as they have no other options.”
Frasers did not respond to a request for comment.
