The Employment Rights Bill introduces significant changes to the regulation of zero hours and low hours contracts, aiming to address the issue of 'one-sided flexibility' that often disadvantages workers. The Bill mandates that employers offer guaranteed hours contracts to workers who have consistently worked a certain number of hours over a reference period, typically expected to be 12 weeks. This measure is designed to provide workers with more predictable and secure working conditions. However, the application of these measures to agency workers presents unique challenges due to the tripartite relationship between the agency, the worker, and the end hirer. The government has initiated a consultation process to explore how these measures can be effectively applied to agency workers, recognizing the complexities involved in their employment arrangements.
Challenges in applying measures to agency workers
Tripartite relationship
Agency workers are employed by an agency but work under the direction and control of an end hirer. This tripartite relationship complicates the application of zero hours contract measures. The government acknowledges that agency workers could benefit from the new rights, but the implementation needs to be tailored to account for the unique dynamics of agency work. The consultation seeks to determine whether the responsibility for offering guaranteed hours should lie with the agency or the end hirer. If the agency is responsible, it may face challenges in guaranteeing hours over which it has little control, as the demand for work is dictated by the end hirer. Conversely, if the end hirer is responsible, it could alter the nature of the relationship, potentially requiring the hirer to assume the role of the employer.
Guaranteed hours and reasonable notice
The Bill proposes that workers on zero hours contracts be offered a contract with guaranteed hours based on their regular working hours during a reference period. For agency workers, this raises the question of which entity should be responsible for offering these guaranteed hours. The government is considering whether both the agency and the hirer should share this responsibility. Additionally, the Bill introduces a right to reasonable notice of shifts and compensation for cancelled or curtailed shifts. The consultation is exploring whether both the agency and the hirer should be liable for providing reasonable notice and compensating workers for any losses incurred due to unreasonable notice.
Potential implications for employers
Business risks and administrative burden
The introduction of guaranteed hours contracts and the requirement for reasonable notice could impose significant business risks and administrative burdens on both agencies and hirers. Agencies may face increased business risks if they are required to guarantee hours without having control over the demand for work. This could lead to financial liabilities if they are unable to fulfil these guarantees. On the other hand, hirers may need to adjust their workforce management practices to accommodate the new requirements, potentially leading to increased costs and operational challenges. The consultation process aims to gather feedback from stakeholders to mitigate these potential impacts and ensure that the measures are implemented in a way that balances the interests of all parties involved.
Impact on flexibility and workforce management
The measures introduced by the Bill could impact the flexibility that agency work traditionally offers. Employers may need to reconsider their reliance on agency workers if the new requirements make it more challenging to manage workforce needs efficiently. The potential for increased costs and administrative burdens could lead some employers to explore alternative workforce arrangements, such as fixed-term contracts or direct employment. The consultation process will play a crucial role in shaping the final implementation of these measures, ensuring that they do not inadvertently discourage the use of agency workers or undermine the flexibility that is often valued in this type of employment.
Consultation and future considerations
Stakeholder engagement
The government has launched a consultation process to gather input from businesses, trade unions, and other stakeholders on how the zero hours contracts measures should be applied to agency workers. This consultation is an opportunity for employers to voice their concerns and provide feedback on the proposed measures. The government is particularly interested in understanding how the measures can be tailored to address the unique challenges faced by agency workers while ensuring that the rights of these workers are protected. The consultation will remain open until December 2024, with further consultations expected in the future to refine the implementation of the measures.
Legislative and regulatory framework
The final implementation of the zero hours contracts measures for agency workers will be determined through secondary legislation and regulations. These regulations will provide detailed guidance on how the measures should be applied, including the definition of 'reasonable notice' and the criteria for offering guaranteed hours. The government is committed to ensuring that the measures are fair and effective, and the consultation process will inform the development of the regulatory framework. Employers should stay informed about the progress of the consultation and be prepared to adapt their practices once the regulations are finalised.
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