Background and overview
The Workers (Predictable Terms and Conditions) Act 2023 started off life as a private member’s bill. It was designed to address “one-sided flexibility” - one of the key issues identified in Matthew Taylor’s 2017 review of modern working practices.
The Act received Royal Assent on 18 September 2023 and is likely to come into effect in about a year’s time. It creates a new right for a wide group of atypical workers – including those with fixed term contracts of 12 months or fewer – to request more predictable working conditions. The grounds on which employers can refuse such a request, and the procedure they need to follow, are both modelled on the corresponding rules in our flexible working legislation.
The Act applies to Great Britain (ie England, Scotland and Wales) but not Northern Ireland.
Which workers will be entitled to this new right?
The right extends to any worker “where there is a lack of predictability, in relation to the work that the worker does for the employer, as regards any part of the worker’s work pattern”. The definition of work pattern extends not only to the number of hours worked, but the days and times on which those hours fall, as well as the period for which the worker is contracted to work. If a worker is engaged under a fixed term contact of 12 months or fewer, the period for which the worker is contracted to work is deemed to be unpredictable.
There are also separate provisions for agency workers which confer broadly similar rights, not only in relation to the employment business by which they are engaged, but also in relation to the hirer to which their labour is supplied.
The right, therefore, extends to a wide variety of atypical workers – a more diverse group than those who have the right to request flexible working, which is confined to employees in the strict legal sense of that term.
Will there be a qualifying period?
Given the kind of workers at whom these new rights are targeted, there won't be a conventional qualifying period in terms of continuing employment. However, there will be a waiting period, starting with the point at which they are first engaged by the employer. This will be specified in regulations. The Government has said that the relevant period will be 26 weeks, subject to Parliamentary approval.
A right to request, not a right to have
Employers will be required to deal with any requests in a reasonable manner and notify the worker of their decision within one month. Requests may be refused on a number of specified grounds, such as the burden of additional costs, detrimental impact on the recruitment of staff or other aspects of the employer’s business, or there being insufficient work during the periods the worker has asked to work. These are similar to the reasons for which a request for more flexible working conditions can be refused.
A maximum of two applications will be allowed during any 12-month period.
As with the flexible working legislation, workers will be able to bring a claim based on procedural failings by the employer, but won't be able to challenge the reasons given for refusal head on.
The maximum amount of compensation will be based on a multiple of a week’s pay, which will be specified in regulations. The maximum is eight weeks’ pay under the flexible working regulations, and it's likely that the predictable working regulations will settle on a similar multiple.
A worker will also have the right not to suffer a detriment because they have made or proposed to make an application for a predictable work pattern, or brought related proceedings. It will also be automatically unfair to dismiss an employee for these reasons. Again, these protections reflect the legal protections that employees making flexible working requests enjoy.
What else is in the pipeline?
The Predictable Terms and Conditions Act was added to the statute book a few months after the Flexible Working Act 2023, which received Royal Assent in July. Both Acts are likely to come into effect at the same time next year, since the procedures employers need to follow in both cases are closely related.
The Flexible Working Act will make a number of changes to the right to request flexible working conditions. The most important of these will be removing the 26 week qualifying period and increasing the number of requests that can be made each year from one to two.
There are several other employment measures that have either recently been passed into law, or will shortly be completing the Parliamentary process. These include new legislation to introduce neonatal leave and pay, enhance redundancy protection for new parents and introduce a new duty on employers to prevent sexual harassment in the workplace. Many of these measures are also likely to come into effect next year, though some may take longer. You can follow their progress on our employment law tracker.
When is the Act going to come into effect?
The Government press release indicated that the Act will come into effect in about a year’s time.
Before that regulations need to be made. They will define the qualifying period, set out the form applications will need to take and specify the maximum compensation an employment tribunal can award for non-compliance.
We'll also need to wait for a new ACAS code of practice, which will provide guidance on how predictable working requests should be made and considered. ACAS has been asked to launch a public consultation on a draft code this autumn.
Please follow the links below for further information about the Predictable Terms and Conditions Act:
Government press release (19 September)
Workers (Predictable Terms and Conditions) Act 2023
More information about the Flexible Working Act is available in our blog posting here:
Flexible Working Act likely to come into force in summer 2024 - Mills & Reeve (mills-reeve.com)
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