The Government has recently announced the landmark Employment Rights Bill, which introduces an obligation on employers to offer ‘guaranteed hours contracts’ to qualifying workers, reflecting the hours they have worked within a specified period. This new legislation marks a pivotal change in how employment is structured, in theory, improving job security for workers across the country, as zero-hours contracts in their existing form have been criticised for their lack of security and predictability, resulting in workers feeling uncertain about their income and working hours.
To qualify for a ‘guaranteed hours contract’, workers must work under a zero-hours contract, or regularly work more hours than those guaranteed in their contracts, over a reference period. The Government is yet to provide clarity on the reference period, although it is currently anticipated to be 12 weeks. However, it has been confirmed that the legislation will prevent employers bypassing the new law by offering guaranteed 30 minute or one-hour contracts.
Failure to offer new or revised employment contracts which comply with the new requirements could lead to tribunal claims being brought against employers. However, there is no obligation on a worker to accept any offer of guaranteed hours. The worker can reject the offer if they prefer the flexibility of their existing arrangements.
In addition, the Bill introduces a new right to reasonable notice of shifts for qualifying workers. Clarification as to what will constitute ‘reasonable notice’ is yet to be finalised. However, the Bill intends that workers will be given more certainty about their working hours, enabling them to plan their lives around work more efficiently. It is important to note that this duty will not apply where the worker suggests a shift or asks to stay longer, and the employer agrees.
The Bill also introduces the right for employees to receive compensation for changed or cancelled shifts if the change occurs with short notice. The compensation is intended to cover the inconvenience and potential financial loss caused by the change or cancellation. The level of compensation that will be available and the meaning of ‘short notice’ is yet to be confirmed by the Government. However, it has been confirmed that compensation will be proportionate to the notice given, i.e. the shorter the notice the higher the compensation payment. This provision is likely to have a big financial impact on businesses that rely on short notice changes to their workforce.
One of the main advantages of zero-hours contracts is the flexibility for employers to adjust staffing levels based on demand. The proposed law on guaranteed hours and the requirement of reasonable notice in advance of shifts will reduce this flexibility. It is expected that the healthcare industry will be particularly affected by these changes. Additionally, there would be an increased administrative burden placed on employers to closely monitor employee working hours, to ensure compliance with the proposed legislation.
There is no need for employers to take any immediate action in light of the Employment Rights Bill – consultations are expected to start next year and the majority of changes are not expected to take effect until 2026.
If you have any questions in relation to the Employment Rights Bill or employment law more generally, please do not hesitate to contact a member of the AfterAthena team (part of the Napthens Group) who are able to offer 30 minutes of free advice to QCS members.
