Show notes
Join Rebecca Cairney and Tahsin Khan as they discuss the Workers (Predictable Terms and Conditions) Act 2023 — also known as the Predictable Terms Act — which received Royal Assent, on 18 September.
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Transcript
Hello and welcome to the Employment Insights Podcast.
It seems like it's been a while since our last one. And this is actually the seventh in our series, where we discuss hot topics and employment law and what they mean for you and your business.
My name is Rebecca Cairney, and I'm a principal associate in the employment team based in Liverpool, and I am joined today by my Manchester colleague, Tahsin Khan, who is an associate based in our Manchester Office.
Today we are going to be discussing the workers. Predictable Terms and Conditions Act 2023, also known as the Predictable Terms Act, which received royal ascent and became law a few weeks ago, on the eighteenth of September, the act promises to reshape the landscape of workers rights, focusing on predictable work patterns and granting employees the rights to request changes to their working conditions.
So Tahsin, what is the background to the new act? And how did it come about?
Well, Rebecca, in the Good Workplan, which was published on the seventeenth of December 2018, the Government stated that it would legislate to introduce the right for all workers to request a more predictable and stable contract after 26 weeks service and consult on proposals put forward by the Low pay Commission, following that in July 2019, the Government published the Good Work Plan consultation. On addressing one sided flexibility.
The consultation confirmed the Government's intention to introduce a right to request a more predictable work pattern, and sought views on the following measures.
Firstly, the right to reasonable notice of working hours. The Low pay commission, recommended that every worker should have a right to reasonable notice of their work schedule.
Secondly, compensation for shift, cancellation, or curtailments without reasonable notice. The LPC. Recommended that workers who had their shifts cancelled without reasonable notice should be compensated, giving workers the right to request. A more predictable contract was also included in the Conservative Party manifesto, in November 2019.
In April 2023, the BEIS committee published a report recommending a default right to a secure contract that reflects working hours after 26 weeks of work.
This is rather than a right to request a predictable work pattern. A right to 4 weeks notice of working schedules and the right to compensation for cancelled shifts. But these recommendations were rejected in July 2023.
Okay, thank you. So that's really interesting. So in a nutshell, what is the act going to do?
Well, it will amend the Employment Rights Act, 1996, to give workers and agency workers the right to request a predictable work pattern where, firstly, there's a lack of predictability as regards to any of their work pattern.
Secondly, the change relates to their work pattern. and, thirdly, their purpose in applying for the change is to get a more predictable work pattern.
Okay? Great. So what does the lack of predictability actually mean? Then, in practice?
Well, rather helpfully, there's actually no definition of predictability, although fixed terms, contracts of 12 months or less are presumed not to have predictability in practice, it's likely that it is intended to cover workers whose work patterns vary in a way that is unpredictable, such as casual workers or workers on annualised contracts.
Okay? So in essence, the changes must relate to the workers work pattern. So on the face of it, that sounds fairly straightforward. But just to be really clear, what exactly do you think that means under the act?
So under the act, a work pattern is made up of any of the following periods worked by a worker. The number of hours, the days of the week or times of the day,the period that they are contracted to work. and such other aspects of a workers, terms as may be specified by regulations.
Okay and how will workers be able to make the application?
So the act says that a worker's application must state that it is an application for a predictable work pattern. It must also specify the change applied for, and the date on which it is proposed to change should become effective. The act does, however, say that future regulations may specify the form that an application must take, and when it is taken to be made, so we'll need to wait and see on that front.
Okay, and is that an application that a worker can make from day one?
No, it's not so the right to request a predictable work pattern won't be a day one right qualifying service which is to be specified by regulations, and it expected to be 26 weeks will be necessary to qualify for the right to make the application, workers will need to have been employed by the same employer. Whether or not that's under the same contract at some point during the month immediately before a prescribed period, which again is going to be specified in regulations.
And that period ends with the making of the application.
Okay, thank you. So what's the advice for employees? How should they be dealing with such a request?
So, firstly, they should deal with the application in a reasonable manner. Secondly, they must notify the worker of the decision on the application within the decision period, and that's defined in the Employment Rights Act as one month, beginning with the date on with, on which the application is made.
An application can also only be rejected if an employee considers that one or more of the following grounds apply, and that's firstly, the burden of additional costs. Secondly, the detrimental effect on ability to meet customer demand. Thirdly, the detrimental impact on the recruitment of staff.
Fourthly, the detrimental impact on other aspects of the employer's business.
Fifth is the insufficiency of work during the period the worker proposes to work.
Six is the planned structural changes. and seventh is any on such other grounds as may be specified in regulations.
Okay, so very similar to rejecting a flexible working application, then, by the sounds of it. So are there any circumstances. When an employee can treat an application is withdrawn?
An employer will be entitled to notify a worker that has decided to treat their conduct as a withdrawal of their application where either of the following apply. So the first is that the worker, without good reason, has failed to attend both the first meeting arranged by the employer to discuss the workers request and the next meeting arrange for that purpose.
Second is that the employer has allowed the worker to appeal against the rejection of their request, or to make a further appeal, and the worker, without good reason, fails to attend both. The first meeting arranged to discuss their appeal, and the next meeting arranged for that purpose.
Okay, thank you. So we've talked about how this will apply to workers. But how will this also then, apply to agency workers?
So it's very similar. Actually, the agency worker will need to apply under whose supervision and direction they're working. An agency workers. Application must state that it is an application for a predictable work pattern, and it must specify. In the case of an application to a temporary work agency, the change applied for, and the date on which it is proposed to become effective.
In the case of an application to a hire it must specify whether the application is for a contract of employment or a worker's contract other than a contract of employment and the date on which it is proposed they should start work under the contract where an agency worker's application to a hirer is for an employment contract. It is to be treated as an application for a contract, to do the same, or broadly similar work to that which the agency worker does for the hirer, with relevant terms, and conditions which, taken as a whole, are not less favourable than those, if any, that at the time the application is made are ordinarily included in the contracts of the hirers employees who do the same, or broadly similar work to that done by the agency worker for the hirer, having regard where relevant to whether they have a similar level of qualifications and skills, or would ordinarily be included in such contracts if the hirer had any such employees.
Okay, so pretty similar, but can apply for also an employment contract. That's interesting. Is there any limit on the number of applications that can be made?
Yes so a worker or agency worker can make a maximum of 2 statutory applications during any 12 month period in each of the following categories.
So the first category is for the purpose of improving predictability. This will include both a request for for a predictable work pattern under the new statutory procedure, and also a flexible working request where the change applied for relates to the workers work pattern, and the change has, or would have, the effect of making their work pattern more predictable. Applications to improve predictability may be made to an employer. Temporary work, agency, or hire.
The second category is where an application is made. Otherwise, then, for the purpose of improving predictability. This will include a flexible working request from a qualifying employee to an employer. and no other application, no application to vary terms and conditions can be made if another statutory application to vary terms and conditions is proceeding.
Okay, so are workers or agency workers able to bring any claims for failures to comply with the new act.
Yeah. So a worker or agency worker who's made an application under the statutory procedure may bring a claim on the basis that the employer, the temporary work, agency, or hirer, failed to deal with their application in a reasonable manner.
The employer, temporary work, agency or hirer failed to notify the worker or agency worker of the decision on their application. Within the decision period.
The employer, temporary work, agency or hirer rejected the application for a reason other than one of the statutory grounds.
The decision by the employer, temporary work, agency, or hirer to reject the application was based on incorrect facts or the employer agency or the temporary work agency, having granted the application, failed to offer the worker a new workers contract in accordance with the statutory requirements or the employer, temporary work, agency, or hirer treated the application as withdrawn, but neither of the grounds enticing the employer to do so applied.
Now, in respect of the first foregrounds, a claim can't be brought until either the employer, temporary work, agency, or hirer has notified the worker or agency worker of the decision on the application or the decision period comes to an end without a decision having been notified.
Okay, so based on that, then what is the potential exposure for clients here?
Well, if an employment tribunal finds a claim is well founded, it must make a declaration to that effect, and it may make either or both of the following so it could make an order for reconsideration of the application. If it does this, the date of the employment tribunals, order will be treated as the date of the application.
and it could also award compensation to be paid by the employer to the worker or by the temporary work agency, or the hirer to the agency worker of such amount as the tribunal considers just an equitable which is up to the permitted maximum. Now, this is to be specified in forthcoming regulations.
But it is important to note that the permitted maximum is currently 8 weeks pay under the flexible working regime.
New sections will also be inserted into the Employment Rights Act, 1996, providing that a worker or agency worker has the right not to suffer a detriment short of dismissal in the following circumstances.
So, first is that the worker or agency worker has made or proposed to make, an application for a predictable work pattern. and second is that the worker or agency worker has brought proceedings against the employer, temporary work, agency, or hirer or allege the existence of a circumstance which would constitute a ground for bringing such proceedings.
A new section will be inserted into the Employment Rights Act, providing that it will be automatically unfair to dismiss an employee, if the reason or principal reason for dismissal is one of the following.
So first is that the employee made or proposed to make an application for a predictable work pattern, whether under the applicable provisions for workers or agency workers.
Second, is that the employee brought proceedings against the employer.
Again, whether that's under the applicable provisions, for workers or agency workers, or alleged the existence of any circumstance which which would constitute a ground for bringing proceedings.
Third is, if an employee was selected for redundancy on the above grounds, that would also be automatically unfair.
There'll be no qualifying period of service for an employee to bring a claim in respect of the automatic, unfair dismissal claim it will also be possible for them to bring a claim for automatic, unfair dismissal on the basis that they have been dismissed for asserting their statutory right to request flexible working.
This will apply where the reason, all principle reason for the dismissal is one of the following, first is that the employee brought proceedings against the employer to enforce a right which is a relevant statutory right?
And second, is that the is where the employee alleged that the employer had infringed a right which is a relevant statutory right?
Okay, so there's an awful lot to consider and work through then for our clients. When this comes in just on that, then, is there also the potential for indirect sex discrimination claims, then so similar to the same way as flexible working? Yes, I would say so absolutely.
Okay. Well, that's good to know as well. So when is all of this going to come into force and our employees going to receive any further guidance on it.
Yes. So the act is expected to come into force approximately one year after royal assent which will give employees time to prepare.
And all that's the intention before that regulations will need to be made. The regulations will define the qualifying period set out. The form applications will need to take unspecified the maximum compensation and employment tribunal can award for noncompliance.
ACAS will also produce a new code of practice to provide guidance in making and handling requests.
A draft will be available of that guidance for consultation in autumn 23. So it should be around now. We will report when that is published.
Okay, so I suppose it's worth also noting here, that a future Labour Government would seek to go even further when regulating in this area by you know, this has been a few suggestions about planning 0 hour contracts altogether and giving anyone working regular hours for 12 weeks or more, the right to a regular contract.
And ensuring all workers get reasonable notice of any changing shifts, for example. So, I suppose, although this act will introduce some important changes when it comes into effect around this time next year. That sounds like it's unlikely to be the end of the story.
Although the new access will eventually introduce some significant changes, it's helpful to know that this is unlikely to be the end of the story on the right to predict predictable work, then
So thanks very much for your time and going through that with us today and thank you to everybody for listening on the podcast if you do need to talk through any of these issues, then please contact either Tahsin or myself. And my email address is rebecca.cairney@weightmans.com and we'll be more than happy to help. And what's your email address? Please?
Yeah. So my email address is, tahsin.khan@weightmans.com.
Thank you very much. So thank you again, everybody for listening, and we will be back with more employment insights very shortly. Goodbye.