The UK government has recently unveiled plans to extend zero-hour contract regulations to agency workers, aiming to improve job security and ensure fair treatment. While this announcement signals positive change for agency staff, there are still several complexities that employers and workers should be aware of.

 Key Details of the Proposed Rules

The government’s new approach stems from a response to a consultation that concluded in December 2024. Despite some industry opposition, the new regulations confirm that agency workers will now be included under zero-hour contract rules.

The main points of these proposed rules include:
– Inclusion in Employment Rights Bill: Previously, agency workers were excluded from zero-hour contract protections. This exemption has now been lifted, meaning agency staff will be entitled to the same safeguards.
– Guaranteed Hours Contracts: After 12 weeks of consistent supply, agency workers must be offered guaranteed hours contracts.
– Notice for Shift Changes: Employers will be required to provide reasonable notice for shift alterations, with both agencies and hirers bearing this responsibility.
– Cancellation Payments: If a shift is canceled on short notice, agencies will be liable for payment but can seek reimbursement from the hirer.
– No Change to Transfer Fee Laws: The existing transfer fee regulations remain unaffected.

What This Means for Businesses

While these changes are designed to protect workers, some businesses have raised concerns. There’s a risk that these measures could reduce the flexibility that agency staffing offers. Additionally, there are fears that increased costs may pose challenges during periods of slow economic growth.

At present, no detailed draft regulations have been issued, and a timeline for further consultation is still pending. While initial plans targeted a 2026 implementation date, discussions with the Department for Business and Trade (DBT) suggest the full rollout may take longer due to the complexity of the legislative process.

How Should Businesses Prepare?

Given the uncertainty surrounding the finer details of these regulations, businesses are advised to:
– Stay informed about upcoming consultations and draft regulations.
– Assess their current workforce arrangements and prepare for potential changes.

While these changes aim to protect agency workers, their long-term impact on business flexibility and operational costs remains to be seen. Employers are encouraged to proactively prepare for these updates to ensure smooth compliance once the rules are finalized.