The Workers (Predictable Terms & Conditions) Act 2023 received Royal Assent on 18 September 2023 and was introduced to tackle one-sided flexibility and help prevent unfair working practices, notably restrictive zero-hour contracts. The Act is expected to come into force in Autumn next year. Regulations and an accompanying Code of Practice are to be released in due course.
Under the Act, a worker will be able to make a formal application to change their working pattern to make it more predictable if their existing working pattern lacks certainty in terms of the hours they work, the times they work or if it is a fixed contract of less than 12 months. Once a worker has made their request, the employer is required to notify them of their decision within one month. Requests can only be refused for reasons specified in the legislation.
On 25 October 2023, ACAS launched a consultation on its draft Code of Practice for handling requests under the Act. Once the Act is in force, this Code of Practice will be taken into account by Employment Tribunals when determining relevant proceedings. On the whole, the draft Code of Practice is helpful for employers. However, there remains two key unanswered questions:
- Which workers will be able to make a request under the Act?
Employees, workers and agency workers will be able to make a request under the Act to either the employer or agency/ hirer, provided they have a certain qualifying period of service.
For employees and workers, the draft Code of Practice states that they must have worked for the employer “at least once in the month in the period before the 26 weeks leading up to the day of the request.” This drafting is unclear and difficult to decipher. Without further clarity, employers will have a hard time determining which of their workers are eligible to make a request.
The position is clearer in respect of agency workers. The draft Code of Practice states that an agency worker will be able to make a request to a hirer if they have worked in the same role with the same hirer for 12 continuous weeks within the 26 weeks leading up to the day of the request. A different qualifying period will apply if an agency worker is making a request to their agency.
- Will employers have to consider termination of fixed term contracts more carefully?
Currently, many employers who hire workers on short, fixed term contracts will simply inform the workers that their contract has not been renewed - rather than following a termination process or detailing the reason for non-renewal. Although non-renewal of a fixed term contract counts as a dismissal by the employer, unless there are extenuating circumstances, the legal risk is low for a worker or employee who has less than 2 years’ service.
Once the Act is in force, eligible workers on fixed term contracts of less than 12 months will have a right to request a more predictable working pattern. This could include a request to extend their contract or a request for a more permanent working arrangement. The employer would then have to follow a process to determine their request and could only refuse it for one of the specified reasons in the Act. As such, employers would need to specifically address why the fixed term contract will not be renewed and ensure the request is dealt with reasonably in line with the ACAS Code.
When it is in force, workers will be able to bring a claim under the Act for procedural failings made by the employer when considering their request. They will also be able to bring a claim if they believe they have suffered a detriment due to making a request under the Act. Ultimately, this is likely to mean that employers will need to consider termination of fixed term contracts more carefully if the worker has made a request under the Act and they wish to mitigate legal risk.
It remains to be seen how workers, including those on fixed term contracts, will use this new right in contractual negotiations. The ACAS consultation on the draft Code of Practice closes in January 2024. We are hopeful that the accompanying regulations and final form Code will provide some much-needed guidance for employers on how to manage these issues once the Act comes into force.
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