The Workers (Predictable Terms and Conditions) Act 2023 was passed on 18 September 2023 and creates a new statutory right for workers on atypical contracts - such as agency workers, short fixed-term workers and those on zero-hours contracts - to request a more predictable working pattern. It is important for employers using these arrangements to be aware of the changes.
The Workers (Predictable Terms and Conditions) Act 2023
Although flexibility is a key characteristic of the UK labour market, the Act aims to address the issue of 'one-sided flexibility' identified in the 2017 Taylor Review of Modern Workplaces, whereby workers are not guaranteed work but are expected to be available at short notice with a lack of reciprocity. The other proposals to combat one-sided flexibility suggested at that time - a right to reasonable notice of work schedules and compensation for short notice shift cancellations – have been dropped.
The terms of the Act are summarised below although note that some of the detail will be published in due course via separate regulations. There is no date for implementation yet, but to give employers time to prepare for the changes the legislation is not expected to come into force until September 2024.
The new right is modelled on the current flexible working regime and will operate in a similar way. However, the right to request predictable working will not be a 'day one right' (as the right to request flexible working is set to become).
In what circumstances can workers request a more predictable working pattern?
Workers will have the right to make a request where:
- There is a lack of predictability as regards any part of the work pattern (the work pattern being the number of working hours, days of the week and times on those days when the worker works, and the contract length);
- The change relates to their work pattern; and
- Their purpose in applying for the change is to get a more predictable work pattern.
Who can request predictable working?
The right extends to all workers and employees subject to a minimum service requirement. Although the length of this has not yet been specified, the government press release has indicated that it will be 26 weeks.
It is not expected that workers will need to have 26 weeks continuous employment, given the aim of the legislation is to improve unpredictable working patterns for atypical workers who are inherently unlikely to have continuous service with the same employer. However, workers need to have been employed by the same employer (whether or not under the same contract) at some point during the month immediately before the minimum service period, ending with the making of the application.
The new law will also apply to agency workers who, if they meet the qualifying conditions, will be able to apply to either the temporary work agency or the hirer to request a more predictable working pattern.
How can predictable working requests be made?
Workers can make a maximum of two applications in any 12-month period. The predictable working application must be (i) in writing; (ii) state that it is a statutory predictable working application; and (iii) specify the change applied for and the date on which it is proposed it should take effect.
If the agency worker is applying to a hirer, they should specify whether the application is for a contract of employment or for a worker's contract. The Act provides some guidance on assessing this.
What about fixed term contracts?
The Act does not contain a definition of 'predictability'. However, it does specify that fixed term contracts of 12 months or less will be presumed to lack predictability: anyone on such a contract will be able to request that the term is extended beyond 12 months or becomes permanent.
What does this mean for employers?
In many ways, the process for dealing with requests reflects the existing flexible working regime. It is not a right to predictable working, it is a right to request predictable working and provided employers deal with the application within one month of receiving it, they are able to refuse the request for one (or more) of the following six grounds:
- Burden of additional costs
- Detrimental effect on ability to meet customer demand
- Detrimental impact on the recruitment of staff
- Detrimental impact on other aspects of the temporary work agency's, hirer's, or employer's business
- Insufficiency of work during the periods the worker or agency worker proposes to work
- Planned structural changes
The government has highlighted the need for effective conversations between workers and employers about the reason(s) for rejecting a request.
Failing to deal with an application in a reasonable manner, or rejecting an application based on incorrect facts, will risk a claim based on procedural failings (with compensation likely to be limited to eight weeks' pay subject to the statutory cap). Employees will have protection against automatic unfair dismissal, and both employees and workers protection from being subjected to a detriment, where they have made or propose to make an application for a more predictable work pattern. There could also be a risk of indirect discrimination claims if requests from certain disproportionately represented groups are routinely rejected (e.g. women, disabled people, young workers).
ACAS have announced they will publish a new code of practice to provide guidance on making and handling requests and the public consultation is expected to go live in the coming weeks.