Preparing for change – How retailers can navigate the new Employment Rights Bill
Author: Roger Clements, Chief Growth Officer at Matrix Workforce Management Solutions.
As the government rolls out the Employment Rights Bill, banning exploitative zero-hour contracts and ending practices like “fire and rehire,” retail sector employers need to prepare for some big changes. This new legislation, which also includes flexible working from day one and sets up the Fair Work Agency to enforce workplace rights, is set to reshape how we manage our workforce.
The planned ban on exploitative zero-hour contracts will probably hit the retail industry the hardest. Retail businesses often rely on a flexible, on-demand labour pool to handle changing customer demands. But now, there’s a need to introduce more structure and address the rights of individual workers.
Right now, zero-hour contracts can be very unpredictable. Shift workers might have their shifts cancelled with little notice and no compensation. While this flexibility benefits employers, it leaves workers vulnerable. The new bill aims to introduce a minimum obligation contract, ensuring a confirmed minimum number of hours for each worker. While this change seeks to protect workers, it raises questions about how businesses will implement these rules while keeping the flexibility needed in a dynamic retail environment.
To comply with the new legislation, HR leaders need to rethink their approach to on-demand workers, starting with a thorough review of their current workforce management practice assessing how often they rely on zero-hour contracts and the average number of hours worked while Identifying patterns and determining minimum staffing needs.
There will also be a pressing need to be ready to offer minimum hour contracts to workers. This might mean guaranteeing minimum hours per week to those previously on zero-hour contracts. Evaluating how many workers currently work fewer than those committed hours a week may help to adjust the workforce strategy.
It’s crucial to communicate transparently with employees about the upcoming changes in addition to ensuring they understand their new rights and the expectations around their working hours. This clarity will help manage expectations and reduce potential conflicts.
There is now a pressing need to shift from treating labour pools as an indefinite resource that we can turn on and off. Instead, there needs to be a focus on creating a stable and reliable workforce. This might involve hiring fewer workers but providing them with more consistent hours.
The new Employment Rights Bill is also likely to revisit and reassess the IR35 payroll working legislation, which will significantly impact the retail industry with the Labour manifesto hinting very strongly at running a formal review into the existing Off-Payroll Working (OPW). These changes aim to clarify the distinction between payroll, temporary workers, and contractors, effectively reducing the vagueness between temporary and casual workers. Retailers will need to adapt to increased government oversight over professional contractors and agency suppliers.
This shift could mean greater scrutiny and higher compliance costs. Firstly, audit your workforce and review your current staff, including temporary workers and contractors, ensuring everyone is correctly classified according to the new guidelines. Next, update your contracts and policies. Revise them to reflect the new legislation, making sure all contracts are compliant and clearly define employment terms, including working hours, pay rates, and job responsibilities.
Finally, engage with legal and HR experts to navigate the new legislation. Their expertise will help ensure compliance and minimise disruptions. The legislation also makes flexible working a default right from day one. Prepare to accommodate flexible working requests, such as compressed hours or remote work, as far as is reasonable. Assess the feasibility within your business model, identify roles that can be done flexibly, and develop clear policies. Train managers to handle requests fairly and consistently. Continuously monitor and adjust as needed to balance employee needs with operational requirements.
The new Employment Rights Bill introduces significant changes that will require you to rethink your workforce management strategies. By proactively adapting to these changes, you can ensure compliance, protect your employees’ rights, and maintain operational flexibility. Now is the time to review your practices, communicate with your workforce, and make necessary adjustments to thrive in this new regulatory landscape.
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