The Workers (Predictable Terms and Conditions) Bill received Royal Assent on 18 September 2023, becoming the Workers (Predictable Terms and Conditions) Act 2023 (the “Act”). The Act is expected to come into force approximately a year from now and will give workers a statutory right to request a more predictable working pattern.
The purpose of the Act is to combat what the government describes as ‘one-sided flexibility’ which affects workers on atypical contracts, such as temporary or casual workers including those on zero hours contracts.
We set out the new statutory process below and explore the potential impact of the Act on both workers and employers.
What is the new statutory right?
Under the Act, a worker may apply for a change to their terms and conditions of employment with the purpose of obtaining a more predictable working pattern if:
- there is a lack of predictability in relation to the work that they do for their employer and in respect of any part of their working pattern; and
- the change they are requesting relates to their “working pattern” which includes the hours, days or times they work, or the period for which they are contracted to work if they are on fixed-term contracts of 12 months or less.
The qualifying period is still to be set by the regulations, but it is envisaged to be 26 weeks’ service which does not need to be continuous.
The application by the worker must specify the change being applied for and the date it should take effect. A maximum of two applications can be made in any 12-month period.
The right will function in a similar way to the right to request flexible working to the extent that it will be a right to request a change rather than a right to have the change granted. Similarly, the employer will be able to refuse the request for a number of specified reasons similar to those available to employers refusing a flexible working request.
Employers will be required to deal with any requests in a reasonable manner and notify the worker of their decision within one month.
If a request is granted then employers must offer the new terms within two weeks of granting the request. Employers cannot make detrimental changes to other contractual terms at the same time as making the changes required as a result of the approved request for predictability.
The right will also apply to agency workers (who can make their request either to the agency or the hirer provided they meet certain qualifying conditions).
Consequences of non-compliance
If the employer fails to follow the requirements set out in the Act, an employee will be able to bring an Employment Tribunal claim and the remedies available will be an order for reconsideration of the application and/or an order for compensation of an amount “not exceeding the permitted maximum”. At present, it is not known what the “permitted maximum” compensation will be, but it is likely to be at a similar level to that set out under the flexible working regime which is 8 weeks’ pay.
Impact for employees
Although atypical contracts can suit some workers who want to work flexibly or part-time, for many the lack of certainty of hours and income and/or being on standby for shifts that may never come, can create serious difficulties and in most cases result in the workers earning significantly less than those doing similar jobs with regular contracted hours.
Evidence also suggests that the feelings of powerlessness and uncertainty about working hours, which derive from unpredictable contracts, contribute to poor mental health and well-being.
The Act should therefore have a positive impact on workers, because in cases where requests are accepted, workers will have more predictable working patterns that fit with their individual circumstances, leading to higher job satisfaction, better well-being and therefore a happier workforce.
Impact for employers
A happier and more secure workforce usually leads to increased productivity and better retention rates, so theoretically these changes should be beneficial for employers too if they are able to accommodate employees working a more predicable work pattern.
On the other hand, for employers who rely heavily on casual or zero hours workers and have a good reason for doing so, there is no reason why they cannot continue these arrangements. It will, however, be important that they set up processes for dealing with requests for greater predictability and that if they are going to decline a request, they ensure that they can justify this based on one of the specified business reasons set out in the Act.