Zero hours contracts

Following the government’s manifesto commitment to end ‘exploitative’ zero hours contracts (ZHCs), the Employment Rights Bill will give certain qualifying workers the right to be offered guaranteed hours over a defined period. Workers who want to remain on ZHCs will be able to do so.

The Bill’s provisions in this regard are exceedingly complex, with much of it subject to consultation. However, in summary, workers will be given rights to guaranteed hours as well as reasonable notice of shift changes and payments for cancelled, moved or curtailed shifts.

The new rights apply to ‘workers’ but not, as currently drafted, agency workers. However the Bill includes the power to extend its application to that group.

Guaranteed hours

• The new rights will apply to ‘zero’ or ‘low’ hours workers who, during the relevant reference period, worked a number of hours that satisfy certain conditions in respect of number, regularity or otherwise.
• The employer will have to, subject to certain exceptions, make an offer of guaranteed hours after the end of every relevant reference period that reflects the hours the worker worked during that reference period.
• Workers will be able to complain to a tribunal if the employer doesn’t make an offer and the tribunal will be able to award compensation based on financial loss, subject to a statutory maximum.
• Secondary legislation will define and elaborate on matters such as the length of the reference period, how the reference period hours are to be calculated, and how to assess whether a guaranteed hours offer reflects the number of hours worked in the reference period.

Shift notice and payment

• The Bill will introduce a right to reasonable notice of a shift an employee is required to work, including the time, day and how many hours are to be worked.
• This duty will apply to workers employed on a ZHC or minimum hours basis, as well as workers who do not have a set working pattern.
• There will also be a right to reasonable notice of any change or cancelled shift. What is ‘reasonable’ notice will depend on the circumstances, but regulations will set out a specific minimum time.
• Employers will have to make a payment to workers each time there is a change to a shift at short notice. Details will be clarified in regulations, but compensation will be proportionate to the cancellation or curtailment.

These new provisions replace the Workers (Predictable Terms and Conditions) Act 2023 which never came into force and which will be expressly repealed once the Bill receives Royal Assent.