Predictable Terms Act 2023: what should hirers of agency workers be aware of?

The Workers (Predictable Terms and Conditions) Act 2023 will come into force in Autumn next year. For the first time, this Act will give agency workers the right to request a more predictable employment or worker contract, not only from their agency, but also directly from the hirer where there is a lack of predictability in their work pattern.  

Once the Act is in force, agency workers will be able to make two requests a year. There will be a qualifying period which will be specified in accompanying regulations, but it is likely that an agency worker will have to have worked in the same role for the same hirer for 12 continuous weeks in the 26 weeks before they make the request. The qualifying period for agency workers under the new Act is therefore expected to be similar to the 12-week qualifying period in the Agency Workers Regulations 2010 which triggers an agency worker’s entitlement to the same basic working conditions as their directly engaged counterparts.

Requests from agency workers under the new Act will need to be dealt with in a reasonable manner and a decision (including any appeal decision) must be communicated within one month.  

Hirers may only refuse a request from an agency worker for specific reasons outlined in the Act, including if acceptance would lead to burdensome additional costs for the hirer. Significant costs could be incurred from directly employing an agency worker - for example, if the hirer offers favourable benefits to employees. However, if seeking to rely on this ground to refuse an agency worker’s request, hirers will need to consider the cost of providing the benefits versus (i) fees incurred from using an agency; and (ii) any additional costs incurred after the agency worker became entitled to the same basic working conditions as those directly engaged by the hirer under the Agency Workers Regulations.

Some practitioners also believe that these new rights for agency workers will put a spotlight on employment status. If requests are refused, hirers may see more challenges about employment status. However, current case law indicates that an agency worker would find it difficult to show that they had any direct contractual employment relationship with the hirer if genuine contractual arrangements are in place between the worker and the agency, and between the agency and the hirer, which reflect how these arrangements operate in practice. The fact that the agency worker can make a request under the new Act or that such a request has been refused is unlikely to be relevant to an assessment of employment status in such circumstances.

Finally, depending upon why the request is being made, hirers should be mindful of indirect discrimination risk. For example, it could amount to indirect sex discrimination to refuse a female agency worker’s request for a more predictable work pattern if the reason for such a request is to help manage caring responsibilities.  

It remains to be seen how agency workers will utilise these new rights. However, hirers would be wise to assess how this new Act impacts their workforce model and consider implementing procedures in due course to assist in handling requests from agency workers.

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