Weeding out “exploitative” zero-hour contracts has been a pledge under the government’s Employment Rights Bill since it was first announced last summer.
This means that it will no longer be lawful for employers to only pay staff when they’re needed. Moreover, they will also be required to give “reasonable notice” and compensation if an employee’s shift is changed or cancelled.
And now, as the government announces further changes to the bill, including scrapping the “Right To Switch Off”, agency workers under zero-hour contracts are expected to receive the same protection.
Agency workers will now be protected from “exploitative” contracts
Under the new rules, agency workers will be entitled to an employment contract that guarantees a minimum number of hours every week. However, they will also have the choice to remain on a zero-hour contract to allow for flexible working.
Unions have campaigned for the government to include agency workers in the ban, with the Trades Union Congress (TUC) welcoming this change.
“The government is right to close this loophole,” Paul Nowak, General Secretary at TUC commented. “To properly crack down on exploitative zero-hour contracts, agency workers will now benefit from more security over their working hours and better protection from bad working practices.”
Recruitment firms describe new rules as “unworkable”
However, major recruitment agencies, including Hays, Adecco and Manpower, have criticised the government’s decision.
Writing to Business Secretary, Johnathan Reynolds, these firms described the new rules as “unworkable”, and that they could lead to reduced hiring and more work being carried out by self-employed contractors.
Moreover, the Recruitment and Employment Confederation (REC) said that this change shouldn’t “undermine” the flexibility that zero-hour contracts offer for some people.
Kate Shoesmith, chief executive of the REC, said that some employees choose these contracts “for the flexibility it provides at a time and stage in their life”, adding that any legislative changes “do not conflict with existing and hard-won protection for agency workers.”
How will the new rules impact businesses?
According to the government website, there are around 1 million temporary agency workers in the UK. Moreover, the demand for agency staff in labour markets is expected to grow, with eight in ten employers planning to hire more of them in the next two years.
For decades, companies have relied on temporary agency workers to address skills gaps and labour shortages, such as hiring more staff for busy seasonal periods, covering employees on sick leave or responding to a sudden increase in workload without the need to commit to full-time employees.
However, businesses looking to hire future agency workers may need to reevaluate their contracts and hiring processes to ensure they adhere to the new rules. For example, as businesses will be required to provide guaranteed working hours if requested, they’ll likely have to include this in a written employment contract. Moreover, with compensation required for cancelled or changed shifts, businesses are more likely to lose out financially.
“Currently, over a million workers face unpredictable hours due to these contracts, undermining their financial stability and health,” Ben Harrison, director of the Work Foundation at Lancaster University commented.
“This reform will help ensure workers – especially those aged 16-24 who are 5.9 times more likely to be on zero-hour contracts than older workers – enter a labour market where good jobs offer both security and flexibility.”