Briefing: The Predictable Hours Act: what employers need to know

04 Dec 2023

In September 2023, the Workers (Predictable Terms and Conditions) Act was passed, giving individuals on atypical contracts – including those on zero hours contracts – the right to request more predictable working hours. In this briefing, law firm rradar looks at the details of the Act.

Where did this come from?
Following the Taylor Review of Modern Working Practices in 2017, there has been a move towards looking at areas where employment law is not quite keeping pace with the way the world of work is changing. One area that the review looked at was zero hours contracts.

The report said:

“One of the points we heard most in our national consultation was concern about the way some employers use this flexibility to transfer risk to, and exert control over, workers. Being able to work when you want is a good thing; not knowing whether you have work from one day to the next when you have bills to pay is not.”

The review therefore recommended the introduction of the Act, noting that it would support many workers who currently experience the concept of ‘one-sided flexibility’.

Who’s eligible?
All workers and employees will have this new right once it comes into force. However, they must first have worked for their employer for a set period before they make their application.

This period will be set out in forthcoming regulations and is expected to be 26 weeks. Given that the proposals aim to support those with unpredictable contracts, workers will not need to have worked continuously during that period.

The role of ACAS
The government has asked ACAS to prepare a new statutory Code of Practice to help workers and businesses understand the law and to provide guidance on how requests should be made and considered. In late October 2023, ACAS announced that it had launched a consultation on a draft code, which sets out good practice on:

Holding a meeting to discuss a request before making a decision;
Who should be allowed to accompany a worker at meetings to discuss a request;
Accepting a request where possible;
Only rejecting a request for certain legally allowed reasons and being clear about the reasons for rejecting it; and
Offering an appeal where a request has been rejected.

The consultation on the draft Code closes on 17 January 2024.

What does the Act say?
The Act says that a worker (not just an employee; this is an important distinction to note) can apply to their employer for a change in terms and conditions of employment if:

There is a lack of predictability, in relation to the work that they do for their employer, regarding any part of their work pattern (see below);
The change relates to their work pattern; and
The reason for them applying for the change is to get a more predictable work pattern.

What’s the definition of a work pattern?
The work pattern is made up of:

The number of hours that the worker works;
The days of the week on which, and the times on those days when, the worker works;
The period for which the worker is contracted to work; and
Other aspects, depending on regulations to be made at some point in the future.

Can the employer say no?
Under the Act, the employer must deal with any request in a reasonable manner, must let the worker know what has been decided within the decision period (one month), and can only reject the application on one of the following grounds:

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 employer’s business.
Insufficiency of work during the periods the worker proposes to work.
Planned structural changes.
Such other grounds as the Secretary of State may specify by regulations.

If this looks familiar, that’s because it very closely mirrors the grounds that employers can currently cite as reasons for rejecting a request for flexible working.

Claims to the Tribunal
If the worker feels that the employer has not complied with the requirements of the Act when considering their request for predictable hours, they can take their claim to an Employment Tribunal. If the Tribunal finds in their favour, then it can either:

Make an order for reconsideration of the application; or
Make an award of compensation to be paid by the employer to the worker.

The amount of compensation can’t exceed the permitted maximum and will be whatever the tribunal considers “just and equitable” in all the circumstances.

The permitted maximum is a number of weeks’ pay as the Secretary of State may specify by regulations – so, at the moment and until the regulations are published, we don’t know how many weeks that will be.

How can workers apply?
Workers can make a maximum of two applications in any 12-month period as a right under the Act, although the employer can, if they want, allow more than that maximum.

The worker must make their application in writing, state that it’s a statutory predictable working application, specify what it will involve and the date on which they want it to come into effect.

Once a worker has made their request, their employer will be required to notify them of their decision within one month.

What to do now
Although the Act and its provisions are due to come into effect in the autumn of 2024, employers need to be ready for the change, to avoid being caught unprepared. Nothing invites HR trouble so much as not having the right procedures in place.

It's also worth noting that recent flexible hours legislation highlighted the possibility of discrimination when considering flexible working requests and this is something that may arise, albeit to a lesser extent with requests for predictable hours. Again, forward planning and access to expert legal advice will enable employers to anticipate and plan for this eventuality.