ICB continues to explain about the contents and provisions within the Great British Employment Rights Bill introduced by the UK Government on 10 October 2024.
This time, we look at the provisions with regard to tackling one-sided flexibility in zero hours contracts (ZHCs) by giving a right to guaranteed hours and the right for the employer to give notice when shifts are cancelled.
The Current Situation
A ZHC is any arrangement / contract that requires a worker to be available for work but there is no guarantee that work will actually be provided. The Office for National Statistics (ONS) estimates that there are over 1 million people are on such contracts making up a large working population. However, whilst these contracts can benefit both workers and employers, it is a long-held belief that employers benefit the most, hence the term ‘one-sided flexibility’.
The previous UK Government aimed to tackle this by introducing the Workers (Predictable Terms and Conditions) Act 2023 which has not been bought into force. The aim of this Great British legislation was to give workers (and agency workers) the right to request a working pattern that was predictable. The 2024 Bill repeals this legislation and goes further.
The Proposed Situation
The Bill does not cover agency workers but does contain the following provisions for ‘qualifying workers’ which are those under a contract of employment:
- The right for qualifying workers to be offered guaranteed hours by looking at the hours worked in a ‘reference period’. Where such guaranteed hours are offered, the employer must vary or give the employee a new permanent contract of employment which details the hours and days of the week the employment is offered
- If the qualifying worker is employed under a ZHC, they are afforded a right to receive ‘reasonable notice’ of a shift. The employer will be obliged to detail to the employee the hours that they will be required to work and the day on which they are to work
- Similarly, if a work requirement is to be cancelled, the Bill requires an employer to provide ‘reasonable notice’ of the cancellation or change. If such notice is not given or given at ‘short notice’, the employer will still be required to make a payment
Note that the Bill does contain a section that allows the above provisions to be extended to cover agency workers.
For Bookkeepers
This is a complicated area of employment law and one that bookkeepers should avoid. The reason for making you aware of this is because any ZHC contract variation or payment requirement may mean an adjustment to the employee’s terms and conditions (and amounts payable through the payroll).
The provisions for guaranteed hours and the right for the employer to give notice in the Employment Rights Bill are complex and only set a framework which will be expanded by secondary legislation (Regulations) once Royal Assent is achieved. Regulations will define provisions such as ‘reasonable’ and ‘short notice’.
On 21 October 2024, the Department for Business and Trade (DBT) published a consultation ‘the application of zero hours contracts measures to agency workers’ which is open until 02 December 2024. After some preliminary identification questions, the consultation asks 10 questions:
With regard guaranteed hours:
1. ‘Do you think the guaranteed hours should be offered by the employment agency (option 1) or the end hirer (option 2)?’
2. If the agency worker accepts guaranteed hours directly with the end hirer (option 2), this means a change of employment contract from agency to employer. The question asks, ‘Should end hirers be required to pay a transfer fee or use an extended hire period if they are required to offer guaranteed hours to an agency worker’?
3. ‘If you think there are other factors specific to agency workers that need to be taken into account in applying the new right to guaranteed hours to them, please explain them here’
With regard giving reasonable notice of shifts and payments for shifts cancelled or curtailed at short notice, the consultation asks:
1. ’Do you agree that the responsibility for providing an agency worker with reasonable notice of shifts should rest with both the employment agency and the hirer, so that where a tribunal finds that unreasonable notice was given, it will apportion liability according to the extent that the agency and the hirer are each responsible for the unreasonable notice?’
2. ‘Do you think that legislation should prescribe how the end hirer should notify the agency that they have a shift available and of changes to these and when notification should be deemed to be received?’
3. ‘If you think there are other factors specific to agency workers that need to be taken into account in applying the new right to reasonable notice of shifts to them, please explain them here.’
4. ‘Do you think that the agency should be responsible for paying any short notice cancellation or curtailment payments to an agency worker?’
5. ‘Do you think that the agency should be able to recoup this cost from the end hirer if/to the extent that the end hirer was responsible for the short notice cancellation or curtailment?’
6. ‘If you think that the agency should be able to recoup this cost from the end hirer, do you think the Government should legislate to ensure that the agency can recoup the costs?’
7. ‘Do you think that it should be possible to override legislative provisions allowing agencies to recoup cancellation/curtailment costs through contracts signed after implementation (or that are clearly entered into in contemplation of the commencement of the legislative provisions)?’ and, finally
8. ‘If you think there are other factors specific to agency workers that need to be taken into account in applying the new right to payment for short notice cancellation or curtailment to them, please explain them here’.
If members are going to respond to the consultation, ICB advises reading the ‘Zero Hours Contracts in the Employment Rights Bill’ factsheet.
