Recently, we explored the proposed changes in employment law that may be on the horizon with the new Labour Government. You can download more information in our free resources here.
One of these initiatives is aimed at addressing the long-standing issue of one-sided flexibility in the workplace by banning exploitative zero-hours contracts, and promising to introduce a new era of job security and predictability for workers. While the exact details of the legislation remain somewhat unclear, it’s crucial for both employers and employees to reflect on how these proposals could reshape the employment landscape.
Shifting Towards Job Security and Predictability
At the heart of the government’s agenda is the desire to end exploitative practices that leave workers in precarious employment situations. The move toward banning zero-hours contracts or limiting their use to non-exploitative contexts marks a fundamental shift in employment policy.
For employees, these changes are expected to bring greater financial stability and job security. Workers who have traditionally been on zero-hours contracts often face uncertainty around income and work schedules, making it difficult to plan their personal lives or manage financial obligations. A potential new right to a contract that reflects regular working hours—based on a 12-week reference period— could mean workers would no longer have to live at the whim of unpredictable schedules. Additionally, potential compensation for short-notice shift cancellations would reduce the financial impact of last-minute changes, creating a fairer balance of power between workers and employers.
On the other hand, employers, particularly those in industries like hospitality and retail may feel the pressure to adapt. These sectors often rely on flexible, on-demand labour to meet fluctuating business needs. While the legislation aims to protect workers, it will likely require significant changes to the way businesses plan shifts, hire staff, and manage workloads. Employers may face increased administrative and operational costs to ensure compliance with the new laws, especially when it comes to potentially providing reasonable notice of shift changes or paying compensation for cancelled shifts.
Balancing Flexibility with Fairness
One of the most significant challenges posed by these reforms is finding the right balance between flexibility and fairness. Flexibility is a key feature of many industries, especially those with seasonal demand. For example, retailers and hospitality businesses during peak seasons tend to rely on workers being available at short notice.
Under the proposed changes, employers may need to provide a contract that reflects the number of hours an employee regularly works, based on a 12-week reference period, and sufficient notice of shifts changes or compensation for last-minute changes. This may conflict with their need for flexibility. However, employees may be able to opt to stay on zero-hours contracts if they wish, provided these contracts meet minimum standards and are not exploitative. This option offers some flexibility for those employees who prefer the freedom that comes with non-traditional work arrangements, such as students.
Employers should start considering how to strike this balance. While some workers may opt for predictable hours, others might prefer the flexibility to pick and choose shifts. Ensuring both preferences are respected while complying with new legal standards will be key to maintaining positive employee relations.
Legal and Practical Considerations for Employers
The road ahead for employers involves careful planning and review of current employment practices. As the Government moves closer to implementing these changes, businesses should review their existing contracts and shift scheduling practices and preventing the misuse of zero-hours contracts, to avoid being caught up in accusations of exploitative practices.
Unresolved Questions and Future Outlook
Much of the proposed legislation is still unclear, and there are still unresolved questions that employers and employees should keep in mind as they prepare for change. One key area of ambiguity is what constitutes an “exploitative” zero-hours contract. The Government has yet to define this term explicitly, leaving some uncertainty about how businesses can ensure they are compliant. Employers will need to keep a close eye on future guidance to understand where the line is drawn between permissible and exploitative use of zero-hours contracts.
Over the upcoming weeks, we will be releasing blogs, in addition to our guides, that will help you navigate through the upcoming legislative changes post 01 October 2024. Missed the guides? Do not worry, you can access them here and all you have to do is pop in your email!
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