28.09.2023
The Workers (Predictable Terms and Conditions) Bill has received Royal Assent, becoming the Workers (Predictable Terms and Conditions) Act 2023. This new legislation introduces a statutory right for eligible workers to request a more predictable working pattern.
As noted in the Government’s press release, the introduction of this right seeks to redress the “imbalance of power” and “one-sided flexibility” experienced by workers in the gig economy. However, the new legislation also has the potential to impact employers outside the gig economy who use atypical working arrangements, including those operating annualised hours contracts and fluctuating shift arrangements.
Scope of the legislation
The new legislation, which originated as a Government-backed private member's bill, aims to improve working conditions for temporary workers and agency workers who are often on insecure contracts for significant periods of time, in roles where shifts are changed and are not predictable or guaranteed.
Once the new law comes into force, eligible workers will be able to submit up to two requests per year to their employer where there is a lack of predictability in relation to any part of their working pattern (be it the number of hours worked, the days and times worked and/or the period for which the worker is contracted to work). Notably, “predictability” is not defined in the Act (except in the case of fixed term workers, as the Act provides that contracts of 12 months or less are considered to lack predictability). The Act includes specific provisions relating to agency workers, who will be able to submit requests for a more predictable working pattern to either their temporary work agency or the hirer (provided they meet certain qualifying conditions).
Process for handling requests
Much like the statutory flexible working regime, employers will need to deal with any requests they receive in a reasonable manner and notify the worker of their decision within a specified period (one month). If an employer decides to grant a worker’s request, they will need to offer the new terms within two weeks of the request being granted. Internal company policies and procedures will therefore be needed to ensure that line managers and HR know how to deal fairly and consistently with any applications they receive.
Employers will be able to refuse a request if at least one of six statutory grounds for refusal applies: additional cost; ability to meet customer demand; impact on recruitment; impact on other areas of the business; insufficiency of work during the proposed periods; or planned structural changes. While these grounds for refusal are on their face relatively broad, scrutiny of an employer’s specific justification for refusal of a request will no doubt be the subject of case law in due course.
If, as an employer, you currently operate atypical working arrangements as part of your business model and you anticipate receiving requests under the new legislation, it is worth considering now which, if any, of these statutory reasons could apply in the context of your business. You may wish to reflect too on whether there are aspects of your current working patterns which you could alter now to provide greater predictability without adversely affecting your operations and thereby minimise the likelihood of receiving such requests. Doing so could reduce the potential administrative burden (and possible employee relations issues) you may encounter once the new law comes into force.
Detailed regulations awaited
Draft regulations will be published in due course setting out more detail on the practical operation of the new rules. In particular, the regulations are expected to state how much compensation an individual will receive if this new statutory right is breached (which is likely to be a specified number of weeks’ pay).
Regulations should also clarify the qualifying period for eligibility. It is expected that individuals will need to have worked for their employer for 26 weeks before making an application for a more predictable working pattern, although this is subject to parliamentary approval. Given that the new rules aim to support workers with unpredictable contracts, it is envisaged that workers will not need to have worked continuously during the 26-week eligibility period.
Timeframe for implementation
The Government expects the measures in the Act and the Regulations to come into force approximately one year after the date of Royal Assent (i.e. around 19 September 2024).
ACAS Code of Practice
In addition, the Advisory, Conciliation and Arbitration Service (ACAS) will produce a new statutory Code of Practice which will provide guidance on how to make and handle requests. ACAS will launch a public consultation on a draft Code this autumn.
How we can help
As mentioned above, Make UK has been engaging with Government on these issues and will be contributing to the ACAS consultation on the statutory Code of Practice.
As with all new legislative changes, Make UK will support subscribers to understand the new provisions and we will keep you updated on developments. If you are a Make UK subscriber, you can speak to your regular adviser for guidance on the law and best practice when dealing with statutory requests from employees. For information about planned changes to the current statutory flexible working regime, see our earlier e-alert.
If you are not a Make UK subscriber, our expert HR and legal advisers can also offer guidance on a consultancy basis. For further information, click here.