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What the Employment Rights Bill really says about zero-hour contracts
Written by Kirstie Smith on 1 November 2024
The recently published Employment Rights Bill signals a new dawn for employment law in Great Britain. Containing no fewer than 28 new measures, the Bill represents the most substantial shift in employment legislation in decades.
Of these measures, the new right for certain workers to be offered guaranteed hours – or, as the headlines often phrase it, “banning zero-hour contracts” – will be of particular interest to many businesses, particularly those in sectors such as hospitality and retail.
What does the Employment Rights Bill say about zero-hour contracts?
It’s worth noting that, despite how this change is being framed in the media, the Employment Rights Bill doesn’t create a blanket ban on employers issuing zero-hour contracts. Rather, it introduces a more discrete requirement: employers will, in certain situations, be obliged to offer guaranteed hours to workers on zero-hour and certain minimum-hour contracts.
The number of guaranteed hours that employers will be required to offer will need to reflect the amount of hours worked by the individual during a specific reference period, which is yet to be defined. The government has indicated that this new measure will seek to offer a basic level of security to workers with a low number of – or zero – guaranteed hours.
In addition, workers will also be entitled to receive reasonable notice of any shift cancellations or changes, and to be compensated for cancelled, moved or curtailed shifts.
In bringing this change forward, the right to be offered guaranteed hours, as explained above, replaces the previous government’s legislation on the right to request a more predictable working pattern.
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But don’t some workers prefer zero-hour contracts?
During the election, the proposal to ban or limit zero-hour contracts was welcomed by many, but it also drew criticism from commentators, with some suggesting that zero-hour contracts are favourable to workers who don’t want to commit to a certain number of hours.
However, this appears to no longer be a concern as, under the Employment Rights Bill, workers are entitled to accept or refuse the offer of guaranteed hours. This new right is therefore unlikely to disadvantage any workers who genuinely want to be engaged on a zero-hour or low-hour basis, as they will simply be able to reject the employer’s offer.
How will the changes to zero-hour contracts impact businesses, and how can employers prepare?
The true effect of this new right, and what it means in practice for businesses who utilise zero or low-hour contracts, will become clear when government introduces further legislation to flesh out this right.
Given the strength of opinion surrounding zero-hour contracts generally, this topic will likely continue to generate a lot of media attention, and by the time the right to guaranteed hours comes into force, workers will likely be alert to the possibility of their employer having to offer them such hours. Businesses would therefore be wise to keep abreast of legal developments in this area and be prepared to review and, if necessary, change their current practices.
Inevitably, this new right will create an administrative burden on employers as it’s likely that businesses will need to consistently monitor working hours of staff whose contracted hours are below the specified threshold. Businesses would be wise to ensure that they have a robust time recording system in place to monitor and keep records of hours worked.
This may also be a timely reminder for businesses to consider whether zero-hour and other flexible-hour arrangements are really required. If they are, then it will be a case of waiting to see how the provisions, once finalised, can be complied with.
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