In the latest of a series of features about changes being introduced as part of the Employment Rights Bill, which is due to get Royal Assent shortly, Andy Nicklin, Employment Partner at Knights, addresses zero-hours contracts and says it is vital that businesses take early action.
“Historically, zero-hours contracts have often brought about uncertainty, and can be seen by some as quite exploitative. What the Bill is trying to do is make it fairer and clearer for those engaged on these contracts by providing more concrete terms and a degree of protection for employees.
Despite the government’s manifesto promising to end “exploitative zero-hours contacts” the Employment Rights Bill doesn’t quite go that far. Nonetheless it will implement significant changes to the use of zero-hours contracts by introducing the following four key protections for those engaged on this basis:
- The entitlement to guaranteed hours
- The right to reasonable notice of shifts
- Compensation for cancelled or altered shifts
- Protection against detriment or unfair dismissal
The Bill is in its final parliamentary stages and, once it gains Royal Assent, the changes will be incorporated into law and the changes rolled out over the next two years. Changes to zero-hours contracts are set to be implemented in 2027 so businesses have a little while to ensure their current practices are up to scratch.
I would imagine the hospitality, retail and health and social care sectors will see the greatest impact – purely because these sectors rely heavily on this type of flexible staffing arrangement. Quite often, the work within these sectors is demand specific and seasonal so use of zero-hours makes sense to ensure that short-term demand is met.
However, the obligation to offer guaranteed hours for example, based on an employee’s average working pattern over a 12-week reference period, may result in circumstances where shifts must be offered but there is no work available for employees to perform.
To ensure your business is ready ahead of these changes being implemented, and in the hope of avoiding such situations where possible, I’d encourage employers to begin the process of auditing their current practices; specifically, be proactive in reviewing shift arrangements and working patterns to assess any potential issues and deal with them, if possible, before they may arise. Investing in the training of management is therefore a must – as managers will need to understand the new obligations and be alive to the risks when scheduling work and shift patterns.
Business may also wish to take the initial time to consider early engagement with trade unions, as the Bill appears to allow scope for employers and Unions to reach ‘collective agreements’ allowing a sector specific approach to the implementation of the changes, and potentially mitigating any significant detrimental impact that the Bill’s blanket approach may have.”
