Employment Rights Bill – House of Lords considers guaranteed-hours provisions

The Employment Rights Bill is currently undergoing the Committee stage in the House of Lords, which involves close scrutiny of the detailed provisions in the Bill and considering proposed amendments.  

The first sitting of the Committee was on 29 April, with the most recent (fifth) sitting on 21 May. Further sessions are currently scheduled for 3, 5 and 10 June, but due to the size of the Bill it may be necessary for additional sittings to take place. 

Guaranteed hours under the Bill

The Committee has already agreed 27 government amendments relating to the complex provisions in the Bill for guaranteed-hours contracts to be offered to workers on low or zero-hours contracts. Many of these changes are technical corrections or consequential amendments to other statutory provisions, but an amendment to the Bill now ensures that workers on annualised hours contracts are brought within the scope of the guaranteed hours provisions. A separate amendment expands the grounds for automatically unfair dismissal in relation to the right to be offered a guaranteed hours contract. 

Concerns have been raised by opposition peers that the guaranteed-hours provisions in the Bill are unworkable for many employers, particularly in sectors such as retail, hospitality, tourism, health and social care where demand for staff fluctuates. The Government has responded by stating that employers will not be “locked in” to a guaranteed hours contract and will still be permitted to offer contact variations to their workers (provided these do not amount to a detriment) and can use limited-term contracts when appropriate. Workers are permitted to turn down the offer of a guaranteed hours contract, and employers will still be able to make redundancies when necessary.  

Recommendations from the Business and Trade Committee

Separately, the Government has recently published its response to recommendations made by the Business and Trade Committee in its report on the Employment Rights Bill, which was published on 3 March. 

In its response, the Government confirms that it will be consulting on the threshold for a low hours contract to fall within the Bill’s provisions for guaranteed-hours contracts, but has not yet provided any specific timetable for this consultation to take place. The Government has also confirmed that it is committed to thoroughly consulting on the details of implementing the Employment Rights Bill more generally, and collaborating with Acas and other partners (including the Equality and Human Rights Commission) in order to ensure a successful roll-out of the Bill. 

The Birketts view

The provisions relating to guaranteed hours are likely to be the most complicated aspect of the Bill for employers to get to grips with in practice, but are unlikely to take effect until well into 2026 (or even beyond). Once consultation on the detailed provisions has been completed, we would expect to see statutory guidance for employers published in good time to allow employers to make the necessary preparations and put processes in place to ensure compliance.