The Workers (Predictable Terms and Conditions) Bill: do we predict a riot of requests?

The Workers (Predictable Terms and Conditions) Bill proposes new provisions in the Employment Rights Act 1996 which would give certain workers, agency workers and employees a new statutory right to request a predictable working pattern. This Private Member’s Bill passed its second reading in the House of Commons on 3 February 2023 and is being supported by the government. It is likely to have the greatest impact on industries where shift patterns vary as rotas change, and where work is very casual in nature, although whether it will amount to much more than another “box ticking” exercise remains to be seen.

The Bill addresses concerns raised by the 2017 Taylor Review and subsequent Good Work Plan regarding so-called “one-sided flexibility”, although it does not fully embrace the proposals that were made at that time. It builds on a 2015 ban on exclusivity clauses in zero hours contracts, which left unaddressed a related concern about workers having to be on “standby” for shifts which may never come. The Good Work Plan proposed a right for workers to request a more predictable and stable contract after 26 weeks’ service, and a government consultation followed in 2019.

At the time, an Employment Bill was expected to be the conduit for this and other promised changes. However, three Prime Ministers later, a single consolidated piece of legislation is becoming a thing of legend, with Private Members’ Bills being used to pick up the work instead. Our article "What’s happening in employment law in 2023?” discusses a number of these.

How will this new statutory right to request predictable working patterns operate?

Workers (and employees)

Under the Bill, a worker may apply for a change to their terms and conditions of employment with the purpose of obtaining a more predictable working pattern if:

a) they have been employed by the same employer (whether or not under the same contract) at some point during the month immediately leading into a “prescribed period”, which ends with the making of the application – the “prescribed period” will be set by regulations but may reflect the requirement for 26 weeks’ employment within the current flexible working regime;

b) there is a lack of “predictability” in relation to the work that they do for their employer and in respect of any part of their working pattern; and

c) the change sought relates to their “working pattern” - hours, days, fixed-term contract period, or any other aspect that could be set out in further regulations.

The Bill contains no definition of “predictability” but appears to capture anyone whose hours or days vary in a way which provides them with an absence of certainty. For example, as well as casual workers with no certain hours, someone with an “annualised hours” contract which guarantees them a certain number of hours over a 12 month period would potentially be caught if the way in which they work those hours varies over time at the employer’s discretion. Similarly, someone whose hours are determined by a rota which varies unpredictably from week to week or month to month as directed by the employer would apparently also be in scope. By contrast, someone who works a shift pattern or to a rota which varies but in a way which is predictable – for example, they always work three weeks in a row on days, then a fourth week on nights, and that pattern repeats itself – would be outside.

Additionally, where a worker is on a fixed term contract of less than 12 months, a worker may request that the term is extended so that the contract is longer than 12 months or becomes permanent. The view taken seems to be that a contract of less than 12 months is intrinsically less predictable in nature, but this may lead to an influx of requests where businesses rely upon relatively short, fixed-term contracts.

There is no obligation on the employer to agree a request, but the employer must deal with the application in a reasonable manner and must respond within one month. Employers with staff working unpredictable patterns will therefore need to design policies and procedures to deal with such requests. An application may only be rejected for specific reasons, which are currently as follows (and largely reflect the list of permitted employer reasons for refusing a flexible working request under the current flexible working regime):

• 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 employer’s business

• Insufficiency of work during the periods the worker proposes to work

• Planned structural changes

If the worker ceases to be employed by the employer during the “decision period” the requirements will still apply. However, the employer can then use additional grounds to reject the application (i.e, the worker was dismissed without notice because of their conduct, or the contract was terminated for a “qualifying reason” which includes a redundancy situation).

If the application is accepted, the employer must provide the worker with a new contract reflecting the agreed change to their working pattern within two weeks. There are also various rules proposed in relation to appeal stages.

Penalties

If the employer fails to follow the above requirements the worker may be able to bring a claim in the Employment Tribunal. This could result in an order for reconsideration of the application or an order for compensation (this is likely to be a number of weeks’ pay which will be defined in further regulations).

The penalties appear to reflect the flexible working regime and therefore the compensation available to employees is not likely to be high (the flexible working regime limits the compensation to 8 weeks’ pay). It remains to be seen how effective a remedy this is likely to be: claims for breach of the flexible working procedural requirements are rare, and the real “teeth” that flexible working applications have is the possibility of an indirect discrimination claim if they are refused. There is no such obvious angle of attack where a request is refused under this Bill.

Agency workers

The Bill proposes a similar set of rights which will apply to agency workers. However, there are different restrictions on when an agency worker can make an application reflecting their particular circumstances.

Restrictions

A worker or agency worker will be limited to making two applications within a 12-month period in respect of a particular employer/work agency/hirer.

This mirrors the proposed changes to the flexible working regime, where the plan is that workers will be able to make two flexible working requests in a 12-month period (up from just one request currently).

If the flexible working request is for a change which has the “purpose of improving predictability”, it is intended that this would also take up one of the two applications under the Predictable Terms and Conditions Bill. If it does not do so then the worker could make up to two flexible working requests and two separate requests under this Bill. However, practically speaking, it might not be straightforward to determine whether or not a request meets the criteria for both a flexible working request and a request to “improve predictability”.

Do we predict a significant impact?

The Bill has departed from some of the key proposals originally tabled in the 2019 government consultation on measures to address one-sided flexibility. These included a right to reasonable notice of work schedules, and compensation for short notice shift cancellations. These proposals have been dropped, with the focus instead being on contractual certainty.

The Bill allows employers to refuse requests for the various reasons explained above unless they cannot point to a particular business need which would allow them to do so. This is likely to be relatively straightforward, and hard for employees to challenge. Employers who rely on workers having less predictable working arrangements will therefore be able to continue with these arrangements but will need to set up processes for dealing with requests for greater predictability. This inevitably calls into question whether the Bill will actually achieve the objectives it sets out to achieve.

In cases where employment status is less clear, there could be additional complications for businesses that rely on the work of freelancers where an individual argues that they have “worker” status and also makes an application for predictable working arrangements.

What next?

The Bill has government backing and follows up on a pledge which was first set out in the Good Work Plan and then repeated in the 2019 Conservative Party manifesto, so it is likely to pass through its parliamentary stages and become law without much debate or opposition. There is currently no date for the Bill’s implementation and further regulations would be needed to enact the rights provided under it, so it seems most likely that the rights will take effect in early 2024.

Employers with operations throughout the EU are, meanwhile, already having to get to grips with the recent EU Directive on Transparent and Predictable Working Conditions, which contains similar requirements. Employers should also note that a future Labour government would seek to go even further when regulating in this area. Labour’s Employment Rights Green Paper states that a Labour government would ban zero hours contracts and contracts without a minimum number of guaranteed hours altogether. It would also enact (the originally-promised) rights to reasonable notice of work schedules and compensation for short-notice shift cancellation. Companies that rely on flexible workforces can therefore expect ongoing regulatory attention.