What change is on the horizon? How can employers adapt?
By Claire Campbell, CEO
In October the government published its Employment Bill including the right to guaranteed hours, ending exploitative zero hours contracts.
Zero tolerance to zero hours?
The focus on zero hours contracts and banning of exploitative work arrangements, in favour of more balanced flexibility – that works, both for employers and staff, has been a consistent element of the government’s plans since before the election.
The use of zero hours contracts in the UK has been growing and we now have over 1 million people on this type of employment contract as their main job. Although this only affects a small proportion of workers overall, some sectors are heavily reliant upon these contractual arrangements – including food and hospitality, health and social care and transport. Certain groups are also disproportionately affected – figures from the Work Foundation suggest that women, young workers (including those aged 16-24 who are not students), and black workers are all more likely than others to be employed on this basis.
A zero hours contract is one where the employer does not guarantee the worker any hours of work and instead offers work as and when it is available. They have been heralded in the past as the solution to flexible work, but this comes at a price – with only a tiny minority of people employed on these contracts having access to regular pay and rights. 3 in 4 workers on zero hour contracts are in severely insecure work.
The government has stated:
“We’re introducing a right to guaranteed hours reflecting the hours qualifying workers have worked during a reference period, anticipated to be 12 weeks. And we’re also enshrining into law the right to reasonable notice of shifts and a right to payment for shifts cancelled or curtailed at short notice”
Zero hours contracts will not be banned completely, but the rules around them will change. Those on both zero and low hours contracts will gain the right to have guaranteed hours if they work regular hours over a reference period, likely to be 12 weeks.
Workers will be able to bring tribunal claims and be awarded compensation. However, they will also be able to remain on zero hours contracts where they prefer.
Workers will also be entitled to reasonable notice of shifts (including details of how many hours are to be worked and when), changes to shifts and cancellation of shifts, and for payment if shifts are cancelled, moved or shortened.
So what can employers be doing now to prepare for this particular upgrade to workers’ rights?
The issue with zero hours contracts for many people is that they can provide a lot of flexibility for the employer and no stability or security for the individual, as they do not guarantee hours or income and make it hard to predict earnings week to week.
Ask yourself:
The government has opened a consultation on whether and how these rights could be extended to agency workers, which you can participate in here.
Further details will be needed including how long the reference period is, how it will be calculated, and how terms such as ‘regular hours’ and ‘low hours’ are defined.
Detailed, practical guidance will be needed to implement the planned changes, including a clear explanation for employers of what is meant by exploitative, and whether all zero hours contracts are in scope. If zero hours contracts are to be permitted in certain cases, the government will need to set out arrangements for monitoring this and ensuring workers’ rights are protected.
Whatever the detail that emerges, there is a clear ambition and opportunity here to improve the predictability and security of working hours and income for workers, which is a welcome direction of travel. At Timewise we look forward to contributing to the detail of the new regulations, and supporting more employers to create good quality jobs.
Published October 2024
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