Thanks to those of you who responded to our recent survey which was prompted by the government's 'Consultation on the application of zero-hours contracts measures to agency workers'.
At the moment the Employment Rights Bill (the Bill) contains a number of provisions in relation to those on zero hours contracts. The Bill contains a power which can extend these to agency workers. While it remains to be seen what the outcome to the consultation will be (and we'll report back once we know) it was interesting to hear your views.
Right to guaranteed hours
Agency or end hirer?
28% of respondents think that guaranteed hours should be offered by the agency, while 17% feel that they should be offered by the end hirer. Those in favour of guaranteed hours being offered by the agency argue that as agencies use many different hirers they will have the scope to redeploy workers elsewhere to ensure that guaranteed hours are being met. One respondent pointed out that as most shifts requiring agency workers are last minute due to sickness, it would be difficult for end hirers to forecast how long these workers will be needed. Another made the point that in areas where demand is unpredictable, or there are significant seasonal fluctuations, the manageable response is to offer the lowest number of hours possible, to offset the possibility of having workers who have contracted hours that exceed demand. The respondent went onto say that companies (specifically those in the hospitality space) that can afford to offer more generous guaranteed hours (and take the risk of doing so) will dominate the market, while smaller companies/charities will struggle to continue to operate.
Those in favour of guaranteed hours being offered by the end hirer were concerned about a lack of control on the part of the agency. It was felt that as the agency is wholly dependent on the demands of the end hirer, it can't afford to pay for hours not worked if they are not charged to the client. It was argued that the duty to offer guaranteed hours should rest with the end hirer as they would know how many hours they need to offer and how much they can budget for; the agency can only follow the end hirer's instructions. There was a concern raised that agencies would be unable to survive or would have to increase their charges to cover the possibility of paid non-work.
End hirers and transfer fees
25% of those responding to the survey thought that end hirers should be required to pay a transfer fee or use an extended hire period if they are required to offer guaranteed hours to an agency worker, while 38% of those responding thought they shouldn't; 38% didn't know.
Of those in favour of end hirers paying a transfer fee or using an extended hire period it was argued that if end hirers have the ability to take workers for free, agencies will have no financial reason to exist and the flexible marketplace will fail. One respondent pointed out that transfer fees already exist to protect the agency and that finding, vetting and placing workers costs a lot of time and money. If an agency worker can then go to an end hirer for free after a period of, say, 12 weeks, then the agency won't have recouped its costs to recruit, let along made any profit on that worker. Another respondent wasn't sure about the transfer fee and felt that an extended hire period may be better while pointing out that this would reduce flexibility for short term cover of say 2 or 3 weeks due to additional costs.
Of the 38% not in favour of the proposed measure it was pointed out that the end hirer already pays an enhanced rate to use the workers and have the flexibility and that this would just make costs higher. One of the respondents pointed out that if a company has already paid a premium for 16 hours a week over a 12-week period, and the agency has earned £3 per hour worked, the agency will already have received a reasonable fee. It was argued that the proposal just seemed to be adding cost for no benefit.
Right to reasonable notice of shifts
Agency or end hirer?
We asked you whether you thought that the responsibility for providing an agency worker with reasonable notice of shifts should rest with both the employment agency and the hirer. 31% of those responding said yes, while the majority of respondents (53%) said no, with 16% remaining undecided.
Those respondents who thought that the responsibility should be a joint one felt that both should be responsible as the agency can't provide the predicted hours without input from the hirer. It was felt that communication between the parties was key to ascertain likely shifts and requirements.
Those who felt that the responsibility should not be joint pointed out that the agency takes a large proportion of the worker's hourly rate with very little risk, while the employer has to pay well over the hourly rate for the convenient of not being responsible for the worker. One respondent pointed out that many workers register with lots of agencies when looking for work, and if an end hirer's permanent employee calls in sick and they need a temp replacement worker, it won't always be possible to give notice. In this situation if there is a minimum notice period hirers would not be able to fill the space which would create an obstacle to business. This was echoed by another respondent who pointed out that the whole point of agency staff is that they are used mainly in emergency situations where it is difficult to plan for the shift in advance.
One respondent felt that the responsibility should lie with the end hirer as they will control short notice or cancellation of shifts, however if the agency then failed to communicate to the worker the liability should then transfer to the agency. It was pointed out by another respondent that as some sectors, for example the hospitality sector, book agency workers daily they don't know what the requirement will be and so it will be hard to make the proposal work. Another respondent pointed out that currently if they cancel a shift with 24-hours' notice or less, they still pay the agency. They then rely heavily on the agency still paying the agency worker.
Legislative provisions for notification of availability/changes to shifts
In response to the question of whether legislation should prescribe how the end hirer should notify the agency that they have a shift available, or any changes to this, and when notification should be deemed to be received, 44% felt that it should, while 41% were against the idea.
Those in favour thought that it would be good for clarity and that ensuring a uniform approach would remove any arguments.
For the 41% who did not feel that there was a need for legislation it was felt that the matter was between the end hirer and the agency and that both parties should find a way to make the relationship work. One respondent stated that the last thing that hirers need is more legislation and that if a long notice period is prescribed "last minute bookings would effectively be banned meaning that deliveries won't happen and business in the UK will become hugely inefficient". It was pointed out that this would be particularly damaging with food or medical deliveries where items can be perishable.
There was also a feeling that the requirements of each end user were different, that maintaining flexibility was important, and that it would be difficult to legislate for every scenario. Different agencies also use different software for booking agency staff so there's no uniformity of approach. Another respondent pointed out that end hirers and agencies already navigate these issues, often via contractual agreement, without the need for further legislation.
Should the agency be responsible for the payment of short notice cancellation payments?
Our survey asked the question of whether the agency should be responsible for paying any short notice cancellation or curtailment payments to an agency worker. 44% responded in the affirmative, 41% in the negative and 16% were unsure.
Of the 44% who thought that the agency should be responsible for these payments some felt that as the agency was responsible for paying them anyway this made sense, though only if the cancellation fees were reimbursed by the employer. One of the respondents stated that to their knowledge this was already their current practice with the agencies that they use.
For the 41% who thought that the agency should not be responsible for such payments, there was a feeling that if the end hirer cancelled at short notice they should be responsible, unless contractual arrangements specified otherwise. One of the respondents noted that it would depend on the reasons for cancellation, but that if the end hirer has contracted with the agency to provide cover then cancels at short notice then it would be unfair on the agency to cover the cost. This would also result in additional fees from agencies to cover their costs and risk.
Legislative provisions for the agency to recoup the costs
Out of the 44% who felt the agency should be responsible for paying any short notice cancellation or curtailment payments to an agency worker, 75% thought that the government should legislate to ensure that the agency can recoup the costs, while 25% thought it shouldn't.
One of the respondents in favour of legislation thought the principle should be legislated for with contractual agreements detailing individual processes. There was a feeling that it might be difficult to legislate for every scenario, and that a possible solution would be for some minimum required wording to be inserted as a standard contract clause.
Those not in favour of legislation were of the view that arrangements should be contractual and that the introduction of legislation would just increase litigation as there would be disputes over who was responsible.
Should any legislative provisions be capable of being overridden?
The final question asked was whether it should be possible to override any legislative provisions introduced which allow agencies to recoup cancellation or curtailment costs through contracts signed after implementation of these provisions. 47% believed that it should and 53% believed that it should not.
Those respondents who believed it should felt that contracting parties should be able to agree their own reasonable terms. One of the respondents believed that a staggered agreement or contract with an end hirer on fees would prompt employers to plan better for the cover they need and to be more transparent on payment to casual workers. Another felt that it would make arrangements easier in practice if they were detailed in the contract that both parties have agreed.
Of the 53% who believed it should not, one of those responding made the point that agencies should be allowed to recoup costs that are out of their control and the end hirer should not be allowed to block this. Another respondent stated that it would lead to abuse of SME agencies if legislation could be overriden.
Meanwhile another respondent stated that some end hirers already try to write indemnities into contracts including indemnities for costs arising from the Agency Workers Regulations.
Conclusion
Your responses show the difficulty of reaching a consensus view on the government's proposals so it will be interesting to read the consultation response once it becomes available.
You can watch our Trowers Tuesday sessions on Zero hours below.
