Employment Rights Bill: Extended rights for agency workers

The Employment Rights Bill (the Bill) will grant more rights to agency workers, including new routes to employment tribunal claims. This article examines the types of claims available if employers try to bypass these rights.

Other articles in our series (Employment Rights Bill | Shoosmiths) give more details of what to expect from the Bill.

What are the claims that agency workers can bring?

Agency workers will be able to present claims in relation to an employer’s failure to comply with:

• the right to be offered guaranteed hours
• the right to reasonable notice of shifts, shift changes or cancellation and to payment for shifts cancelled, curtailed, or moved at short notice
• the right not to be subject to any detriment because the worker intends to accept a guaranteed hours contract, rejected a guaranteed hours contract, brought proceedings in connection with the rights provided under the Bill, or alleged any grounds on which they had the right to present proceedings under the Bill

It is likely that employers are already giving much creative thought about how they might be able to reduce or even avoid some of the consequences of the Bill.  Parliament appears, however, to be one step ahead as the Bill has several built-in measures to reduce the scope for avoidance, to which most have their own penalties attached.

What are the anti-avoidance measures?

Initially, it appeared that employers would be able to circumvent the obligation to offer guaranteed hours by ensuring low-hour workers only worked below the threshold number of hours during the reference period or that zero hours workers are engaged for periods that are shorter that the reference period. However, a government amendment introduced several anti-avoidance measures.

Workers have the right to bring complaints in the employment tribunal against the agency where the duty to make a guaranteed hours contract applies but the agency:

• limited (by whatever means including termination) the number of hours of work the worker was required or requested to work
• caused the worker to work for the hirer in specific ways
• each done with the sole purpose of avoiding or triggering a guaranteed hours offer or to reduce the hours for which the guaranteed hours offer must be made

We have emphasised the termination wording for good reason – the effect of this provision is to provide an agency worker with the right to present a claim in connection with the termination of their engagement – this is significant and will mean that both agencies and hirers will be required to maintain records to show why they did (or did not) act as they did towards the agency worker in order to defend such claims.  Other parts of the legislation are littered with references to termination for approved reasons – the ability to justify such dismissals can only arise through strict record keeping.

What happens if an employer dismisses an agency worker to avoid making a guaranteed hours offer?

The worker will be entitled to present a claim for damages which equate to the payments that the worker would have received had the agency not limited their hours as alleged.  The time limit for any claim would be 6 months from the date when the guaranteed hours contract should have been made.

Agency workers can bring these claims against the hirer or the work-finding agency subject to which party has limited the hours during the relevant period.

Where an agency worker is successful in bringing a claim, the employment tribunal may make a declaration and an award of compensation. Any compensation will be subject to a maximum cap which will be specified in the regulations.

Detriment

Claims for detrimental treatment are nothing new but, unlike with some other areas of law, an agency worker will be entitled to present such a claim where the alleged act of detriment is the termination of the contract itself.  In those cases, an agency worker would be entitled to present a claim which could generate compensation equal to that which an employee who was automatically unfairly dismissed would be awarded.

Next steps

Whilst we do not expect the rules in relation to agency workers to come into force until 2027, it is important that businesses review their operations to understand how agency workers are currently being used and the extent that the Bill will impact their business. It will also be important for businesses that use agency workers to prepare its managers, recruitment and procurement teams for the changes. Accurate record keeping will be crucial if businesses (both work finding agencies and hirers) are to be able to defend the myriad of claims that will be available under the Bill.

Our advisers are on hand to provide expert advice and insight into the upcoming changes proposed by the Bill and the impact on your business. If you would like advice or assistance with any of the above, please do get in touch.