The Workers (Predictable Terms and Conditions) Act 2023
What is the background to the Act?
The act amends Section 80 of the Employment Rights Act 1996 (ERA 1996) and gives eligible workers a new statutory right to request a more predictable working pattern. This follows the Taylor review of modern working practices and the resulting 2018 Good Work Plan in which the government committed to introduce policies to end “one-sided” flexibility.
When does the Act come into effect?
The Act received Royal Assent on 18th September 2023. On 25th October 2023, Acas published a consultation on a draft statutory code on handling requests for a predictable working pattern. The code will aim to help workers and businesses understand the law and provide guidance on how requests should be made and considered. The REC will be involved in the consultation which closes on 17th January 2024 with the statutory code expected to be in force by autumn 2024.
The act will be implemented in full after Regulations specifying how the act is to be applied are made by the Secretary of State. It is currently anticipated that the act will be in full force by September 2024.
What requests can a worker who is not an agency worker make under the act and what are the conditions for doing so?
A worker who is not an agency worker can apply for a change to their terms and conditions which has the effect of changing their working pattern provided the following conditions apply:
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They have been employed by the same employer (whether or not under the same contract) at some point during the month immediately preceding a 'prescribed period’ (to be defined in the regulations but is expected to be 26 weeks ending with the date of the application). There is no requirement for the service during the prescribed period to be continuous;
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A worker has not made more than two applications (including requests for flexible working which would result in a more predictable contract) under the flexible working provisions in any 12-month period;
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There is a lack of predictability in any part of their working pattern (the work pattern being the number of working hours, the days of the week and the times on those days when the worker works, the length of the worker’s contract and any other aspects of the workers’ terms and conditions stipulated by the regulations); and
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The application states that it is a request for a more predictable working pattern, and specifies the change applied for and the date on which the worker would like the change to take effect.
What requests can a temporary agency worker make under the act and what are the conditions for doing so?
An agency worker can make an application to either their temporary work agency or the hirer for a change to their terms and conditions which has the effect of changing their working pattern to provide more predictability provided the following conditions apply:
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They are engaged by the agency either under a contract for services or a contract of employment at some point during the month immediately preceding a 'prescribed period’ (to be defined in the regulations);
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They have worked for a hirer in the same or broadly similar role continuously for a qualifying period of 12 weeks as defined under the Agency Worker Regulations 2010. They can apply to the hirer for a contract of employment, or another worker’s contract, which is more predictable than their current working pattern.
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They have not made more than two applications (including requests for a flexible working which would result in a more predictable contract) under the flexible working provisions in any 12-month period;
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There is a lack of predictability in any part of the work the worker is supplied to a hirer to do regarding their work pattern (the work pattern being the days of the week on which, and the times on those days when, the agency worker works, the period for which the agency worker is supplied to work and any other aspects of the workers’ terms and conditions stipulated by the regulations); and
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The application states that it is a request for a more predictable working pattern, and specifies the change applied for and the date on which the worker would like the change to take effect.
What action should an employer, hirer and a temporary work agency take in response to an application?
An application must be dealt with a reasonable manner and should be responded to within one month of the application being made (the decision period). The one-month decision period relates to a decision on the initial application and an appeal.
A worker (including an agency worker) must be notified of the response to their application during the decision period. even if their contract with the agency is terminated or their assignment with the hirer to whom they have made the application comes to an end.
An application must also be dealt with in accordance with ACAS’s statutory code on handling requests for a predictable working pattern. The proposed draft statutory code, sets out good practice principles including:
- Issues to be factored into the consideration of a request;
- The possibility of allowing workers to be accompanied at meetings to discuss a request;
- That organisations should set out any additional information which is reasonable to help explain their decision on a request; and
- That organisations should allow an appeal where a request has been rejected.
An application can be rejected if one or more of the following grounds applies:
- The 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 temporary work agency or hirer's business;
- Insufficiency of work during the periods the agency worker proposes to work;
- Planned structural changes; and
- Any additional grounds as specified in the regulations.
An agency and a hirer can also reject an application on the following additional grounds:
- The agency worker terminated their contract with the agency / refused to continue to be supplied to the hirer and did not do so in response to some conduct by the agency / hirer;
- The agency terminated the contract / the hirer asked for the agency worker to no longer be supplied to them due to the conduct, capability or qualifications of the agency worker or because of some legal restriction which means the agency worker can no longer do the work they were supplied to do.
What are the next steps after a request to a temporary work agency is granted?
If the temporary work agency grants the application, the agency must, before the end of the offer period (2 weeks after the grant of the application), offer the agency worker a new contract with terms and conditions that:
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Taken as a whole, are not less favourable than the terms and conditions of the contract that the agency worker had with the temporary work agency at the time the application was made, and
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Reflect the change relating to the agency worker’s work pattern that was applied for.
What are the next steps after a request to a hirer is granted?
A contract reflecting the request made by the worker should be issued. In issuing such a contract the hirer must consider that an application made by an agency worker to a hirer for a contract of employment should be taken as an application for:
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The same or broadly similar work to the work that the agency worker does for the hirer under terms and conditions which are the same as those ordinarily included in the contracts of employees of the hirer doing the same or broadly similar work at the time of the application.
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Having regard, where relevant, to whether they have a similar level of qualification and skills or would be ordinarily included in such contracts.
Where an application to a hirer for a worker’s contract other than a contract of employment is made, a hirer should treat it as an application for:
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The agency worker to do the same or broadly similar work to the work that the agency worker does for the hirer under terms and conditions which when taken as a whole, are not less favourable than the contracts of the same workers of the hirer who are not employees; and
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Having regard, where relevant, to whether they have a similar level of qualification and skills or would be ordinarily included in such contracts.
What are the liability risks for a hirer, employer and a temporary work agency under the Act?
Workers are entitled to bring employment tribunal claims if either their employer, hirer or temporary work agency:
- did not handle the request in a 'reasonable manner'.
- wrongly treated the application as withdrawn.
- subjected a worker to a detriment or unfairly dismissed an employee poorly because of their request, for example stopped giving them assignment or prematurely terminated assignments because they made an application.
- rejected an application based on incorrect facts.
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that the policy relied on in refusing a request is indirectly discriminatory, for example because it has a disproportionately negative impact on those with a protected characteristic.
Additionally, the draft statutory code on handling requests is issued under section 199 of the Trade Union and Labour Relations (Consolidation) Act 1992. This means that where a claim related to the Predictable Terms and Conditions Act is brought in the employment tribunal, an award of compensation could be subject to a 25% uplift where an employer/hirer or employment business have failed to follow the code.
Key Takeaways for REC Members
- The rights afforded to workers under the Workers (Predictable Terms and Conditions) Act 2023 are rights to request predictable terms and conditions and not the right to have the request granted;
- It is important to have robust policies in place to deal with requests and to consider each request on its own merits; and
- Reasons for refusing requests must be sufficiently explained to mitigate the risk of appeals and Employment Tribunal claims.