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ESOS shock for zero hour contracts

ESOS Scheme InfographicESOS, the Energy Savings Opportunity Scheme, which is due to conclude its first instalment on 5th December this year is already proving a large undertaking for businesses themselves deemed as large undertakings. The scheme, operated by the Environment Agency in line with the EU Energy Directive requires businesses with more than 250 employees or a turnover in excess of £38m to abide by its rules and undertake a full suite of compliant energy audits, complete with recommended actions for energy efficiency gains by the December deadline.

The problem is the ‘qualifying’ businesses fall into two categories 1) the belt and braces, larger organisations who through their own or external resource have wrapped up all things ESOS already and 2) the rest who were pinning their hopes on a new administration post Election neutering the ESOS requirement.

That was never going to happen, the EU rules over these things and all the UK government can do is implement a solution which balances minimum disruption with sufficient compliance.

This unhappy balance has led all too many companies to need to comply in all too short a timescale – 200 days in fact – and with only so many ESOS Lead Assessors to go around the scramble for slots are intense.

But the inside word is that the Environment Agency does not expect a significant minority of obligated businesses to adhere to the ESOS deadline and that 6th December will bring an unwelcome early Christmas present for UK businesses with a fine falling on the door mat. Whilst these fines are unlikely to be at the highest end of the £50,000 range for the average ESOS business it is hardly a palatable thought especially with too many businesses trying (or not as the case may be) to fit into too few spaces.

Indeed some Lead Assessors and ESOS experts are forecasting that 2016 will actually be a busier ESOS year than 2015 as the fines become reality and the obligations become clear. That is even though there is no ESOS reporting requirement scheduled for 2016 given its four yearly cycle.

So against this background what is just about the worst news imaginable for affected businesses?

That’s right, the government opening up the ESOS obligation to even more businesses with just 200 days to go!

Yet that is exactly what has happened as the government has decided that businesses operating zero hour contracts must include each such ’employee’ in their count to and beyond 250. Whilst the prevalence of zero hour contracts in the UK is not accurately known their political sensitivity suggests they are far more widespread than just the usual suspects and that means many more ESOS compliant businesses suddenly having to access the market. A market which has a finite life and an obligation to buy.

If ESOS wasn’t already a headache it sure as heck now is.

Our advice as ever is to engage as soon as possible; using our service you can even get an indicative quote for your business and though places are increasingly limited as businesses rush for compliance, there are still spaces left ahead of the deadline.

Don’t be a zero, get ESOS compliant.