Will Agency Workers Fall Within the New Zero-Hour Contract Legislation?
As part of the government’s approach to changes in employment legislation, readers will no doubt be aware that one of the options, that the government considered in the Employment Rights Bill, was the right for directly engaged employees and workers to be provided with a more stable and predictable contract. Currently, the provisions of the Employment Rights Bill, published earlier this month, do not cover agency workers. As a result, the government has now launched a consultation seeking views on the potential application of similar measures to workers who supply services in the context of a tripartite relationship (i.e. agency workers). The key measures that we are exploring today are:
- The right to guaranteed hours,
- Reasonable notice of shifts, and
- Short notice cancellation and curtailment of shifts.
The right to guaranteed hours
The government envisages that agency workers should have the right to guaranteed hours that reflect the hours they regularly work. In the case of agency workers that right would be subject to a 12-week qualifying period i.e., it would be only after 12 weeks that the agency worker would be entitled to receive a contract with guaranteed hours that reflect hours regularly worked over a 12-week reference period. What the government is less certain of is where the responsibilities should fall, after that qualifying period, and whether they should lie either with the hirer (or end-client) or with the recruitment agency (the agency).
An important qualification is that the government appears to accept the contract offered should be permanent, unless the work is inherently temporary. The proposal envisages that the putative agency worker would still have the option to decline an offer of a guaranteed hours contract and remain on their existing contract.
Reasonable notice of shifts
Secondly, the government is consulting on a right for agency workers to have reasonable notice of shifts as well as any changes to them. This is intended to provide workers with greater certainty about when they will be working and the number of hours they will be working.
The government proposes that both the end client and the agency should be responsible for providing agency workers with reasonable notice of any shifts offered and cancellation of any allocated shifts.
To enforce this right, agency workers would be able to take a claim to the employment tribunal against both the agency and the end client, where a notice of shifts is unreasonable. A tribunal would be able to hold either the agency or the end client, or both, liable to compensate the agency worker for losses suffered due to unreasonable notice being given, to the extent that they are respectively responsible.
To a large extent, many agencies already take steps to ensure that agency workers receive reasonable notice of shifts, but there are sectors of industry where this may prove difficult to achieve. If enacted this is likely to result in increased administrative costs, for both the agency and the end client, because they would need to record and retain evidence that a worker had been provided with reasonable notice of shifts and changes.
Short notice cancellation and curtailment of shifts
Thirdly, and linked to the above, the government has proposed that agency workers should receive payment for shifts that are cancelled, moved, or curtailed at short notice. The intention behind this proposal is to encourage employers to plan effectively and provide workers with more financial certainty. The government proposes that the agency should pay any cancellation payment to the agency workers and is consulting on whether the agency’s ability to recoup those monies from the end client should be left to the agency and the end-client or set out in legislation.
The consultation envisages that details such as: (a) the amount of the cancellation or curtailment payment; (b) what constitutes short notice; and (c) some limited exceptions from the requirement to pay will be set out in regulations.
Comment
As far as the measures relating to zero-hours contracts are concerned, the government’s approach is no surprise given their manifesto commitments arising out of the Making Work Pay policy paper.
Unfortunately, as with much of the recent Employment Rights Bill, the government has left significant scope for consultation and potentially substantial change to the legislation. The government labels itself as being pro-worker, pro-business and pro-growth. It has recognised that there are practical complexities as well as detailed issues that need to be addressed, in the context of the tripartite relationship that exists between a worker, an agency, and an end-client. How it ultimately balances security for the worker and flexibility for business will ultimately determine whether this government does indeed turn out to be pro-growth.
