Recruiting temporary workers for Christmas: Five legal risks for retailers

The Christmas rush often requires fast-paced hiring of temporary staff, but recruiting these workers can give rise to legal risk.

Retailers should focus on five key areas when managing seasonal recruitment to avoid these pitfalls.

1. Agency workers

Some retailers might turn to agency staff to cover the increased Christmas workload. When doing so, it’s important to be aware that agency workers gain the right to have the same pay and working conditions as permanent staff after 12 continuous calendar weeks in the same role over one or more assignments.

This creates a particular trap for retailers who may want to use agency workers to cover the pre-Christmas period and the busy January sales period as well. Retailers should monitor their use of agency staff carefully to identify any who might be at risk of hitting the 12-week mark. 

2. Zero-hours contracts

Where retailers want to engage workers directly to cover shifts on an “as needed” basis, they will generally use zero-hour contracts.

When doing so, employers should ensure that the contractual documentation used to engage these workers makes the zero-hour arrangement clear and confirms that there is to be no expectation of guaranteed work. It is also important to remember that zero-hours workers still have some key employment rights, including the right to paid annual leave, which accrues at a rate of 12.07% on all hours worked.

Employers can either pay workers in lieu of this holiday entitlement (clearly itemised on payslips) or allow workers to take paid time off during their engagement. The first option is likely to be preferable given the need for these workers to be available to cover busy periods. The contract should make clear what approach is going to be taken. 

3. Right to Work checks

Every employer must check original documents proving right to work for every staff member before they start work, with no exceptions for temporary or seasonal workers.

The penalties for illegally employing someone are severe: up to £45,000 per illegal worker, plus potential criminal prosecution for knowingly employing someone without the right to work. Retailers must check the required documents, make copies, and date them before the first day of work.

The Christmas rush is not a defence, and immigration enforcement agencies have been known to target retail businesses during peak seasons. 

4. Discrimination

Discrimination claims can arise from recruitment, even from unsuccessful applicants, and tribunal awards are unlimited with compensation regularly exceeding £20,000.

High-volume Christmas recruitment may increase the risk of discriminatory practices creeping in. Avoid advertisements seeking "young, energetic" staff which may constitute age discrimination, or making assumptions about disabled candidates' capabilities.

Retailers should use objective, job-related selection criteria, train anyone involved in hiring on discrimination law, and ensure that recruitment decisions are based on genuine requirements of the role rather than assumptions or stereotypes.

5. Ending engagements

Contracts with temporary staff (whether zero-hours workers or fixed-term employees) should have clear termination provisions so you can end the engagement once the seasonal demand has subsided.

Final payments to all staff at the end of an engagement must include all wages for hours worked and accrued holiday pay or the employer risks claims for unlawful deductions from wages.  

Conclusion

Bolstering your workforce for the Christmas period is a necessary and accepted practice for retailers. However, it can be costly if steps are not taken to comply with the law.

By focusing on the above essentials, retailers can build an effective temporary workforce whilst minimising legal exposure during their busiest trading period.