Zero Hour Contract Workers
Zero Hour and Minimum Hour Workers Must Be Offered Guaranteed Hours
Under the new regime Zero Hour Contract Workers and those employed on Minimum Hours (collectively known as Qualifying Workers) must be offered regular hours that reflect the hours they have worked in practice. Conditions will also be set for how much notice an individual should receive about required shifts with additional notices for changes and cancellations to previously agreed shifts. Compensation will also be payable to employees for any changed or cancelled shift.
Current Legislation
This page was first published on 21 August 2024, the latest update was made on 29 October 2024.
Zero Hour Contracts are used in many sectors to provide a flexible workforce that can be called on at short notice to cover absences of full-time employees or for peaks in workload. The only legislation that affects zero-hour contracts relates to exclusivity clauses and the provisions prevent an employer from stopping a zero-hour worker from taking other employment.
Proposed Changes
Under the legislation that was introduced by the Conservative Government and repealed by the Labour Government the onus was on the employee to request a contract that reflected the hours the regularly worked; this legislation places the onus on the employer to make an offer of hours that reflect the individual has been working.
The intention is to prevent “exploitative” zero-hour contracts. Contracts offering Minimum Working Hours have been brought into the scope of the legislation, to prevent zero hours contracts being replaced with contracts guaranteeing a minimum number of hours per week.
The new regime will introduce the following duties on employers:
Duty to Offer Guaranteed Hours
The employer will have a duty to make an offer of guaranteed hours to zero hours and minimum hours workers. The offer must reflect the pattern, days and times of day worked during the ‘reference period’ and must be made by a ‘specified date’.
The offer of guaranteed hours may be in the form of a contract variation or a new contract. The terms and conditions of the offer of guaranteed hours must be the same as the original offer and can only be for a temporary period where the original zero or minimum hours contract was temporary.
The duty to make an offer will be repeated as each reference period is worked. So, if the reference period is 12 weeks a new employee would become eligible to receive an offer of guaranteed hours during the 13th week of employment, then again on the 25th and 27th weeks and so on.
What We Don’t Know
- Minimum Hours Contracts: the number of hours will be determined through consultation (7 hours has been muted).
- The reference period: may be the pay period or a specific period of time (12 weeks has been muted).
- The specified date: will be a timeframe after the end of the reference period such as within 28 days of the end of the reference period or before the end of the next reference period.
These unknowns will be agreed following consultation.
Accepting or Declining the Offer
The individual will be able to agree, ignore or decline the offer, but the offer must be made.
The timescale for agreeing or declining will be agreed following consultation.
Seasonal Workers and Fluctuating Workloads
Problems will arise where individuals are eligible for an offer of guaranteed hours and accept the offer, then the requirement for workers of that type reduces. If you then dismissed the employee due to a reduced requirement (redundancy) you risk claims that the dismissal was because the employee accepted your offer of guaranteed work.Watch this space as I will keep a close eye on this and will update this page as soon as more information becomes available.
Failure to Comply
Employees who qualify and are not offered guaranteed hours will be eligible to make a claim to the Employment Tribunal; the level of compensation is not defined yet.
Reasonable Notice of Requirement to Work
The duty to provide reasonable notice of the requirement to work applies where shifts are irregular. So individuals working set hours such as Monday to Friday 9am to 5pm would not be affected by this requirement.
Employers will be required to provide reasonable notice of hours the individual is required to work. The notice must provide the total hours, the days of the week and the start and finish times of each shift.
The reasonable period of notice and how notice should be given is not defined as yet.
Bank Staff
Problems will arise where you employee a group of individuals as back up (often referred to as bank staff) to cover absences of other employees and peaks in workload. The aim of this group of individuals is you are able to contact them and ask them to work often at short notice. If an employee phones in sick at 8am for a shift due to start at 9am you can’t provide 24 hours notice.Watch this space as I will keep a close eye on this and will update this page as soon as more information becomes available.
Reasonable Notice of Cancelled or Changed Shifts
Where a shift is cancelled or the day of work or start or finish time is changing the employer will be required to provide reasonable notice to the employee.
What is reasonable or unreasonable notice of cancelled or amended shifts is not defined as yet.
Compensation
A payment will be due to employees when previously agreed shifts are cancelled, moved or curtailed at short notice. Different amounts will be payable depending on the amount of notice that was given of the cancellation, movement or curtailment. The maximum is likely to be equal to the value of the wages that would have been paid if the hours had been worked.
The scale of compensation is not defined as yet.
Unexpected Quiet Periods
Problems will arise where you have requested additional staff to work a shift because you are exepcting to be busier than normal. For instance if you run a pub you might have extra staff for popular sporting events; if the pub wasn’t as busy as expected you might decide to send some of your team home. as that would be a short notice curtailment you would be liable for compensation that would probably be equal to the hours the individual would have worked had you not sent them home. So you aren’t gaining anything by sending them home.Watch this space as I will keep a close eye on this and will update this page as soon as more information becomes available.
Employee Requests a Change
Where an employee requests a change of shift or offers to work a longer shift the reasonable notice conditions will not apply.
Agency Workers
Often an agency worker is requried at short notice, to cover a gap created through absence of an employee or an unexpected peak in workload. The cancellation of the requirement could also happen at short notice.
A consultation has been launched which asks:
- who is responsible for providing notice of shifts;
- who is responsible provoding notice of cancelled and curtailed shifts and paying compensation
- who is responsible for offering guaranteed hours (agency or employer)
- if a guaranteed hours contract is triggered doe the Temp to Perm fee become payable.
The consultation closes on Monday 2 December 2024.
If you use agency staff your provider will no doubt, ask you for your views. If they don’t you can respond personally by clicking the button below and answer the questions.
How To Prepare
To prepare for this change, it is worth reviewing the processes you have in place for issuing rotas and changing or cancelling shifts once rotas are issued. In light of the compensation scheme, consider whether you are able to anticipate peaks and troughs so you can avoid leaving shift changes and cancellations to the last minute.
Review the hours your zero hours and minimum hours workers are working, go back 12 weeks or further to establish whether there are any patterns. This will give you an indication of the offers you might need to make to each employee.
Review the number of shifts you have cancelled, rearranged or cut short over the last 12 months. Take the higher rate of the NMW rate of £11.44 and multiply that by the total number of hours cancelled, rearranged or cut short; that will give you an idea of the cost of compensation you might be paying if the pattern was repeated under this new regime.
Moving forward, if your business has seasonal surges a shift in practice from using zero hours contract workers to using fixed term contract workers may provide the same flexibility with less administrative burden.
HR Software
With Breathe’s Rota, Time & Attendance tool, you can easily manage shifts and simplify processes for managers and employees.
- Create automated and personalised reports.
- Build and publish your staff rota.
- Record start and finish times with Timeclock.
- Save timesheets securely.
- Accept, decline and swap shifts with personal dashboards.
Need Support?
If you currently use zero hours contracts and are considering remodelling to avoid this legislation please get in touch. I can help you decide on the right approach for your business and implement the new approach smoothly.
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