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The UK government has announced a significant change aimed at improving working conditions for agency workers. Under the new Employment Rights Bill, the government will ban zero-hour contracts for agency workers, ensuring that these workers receive compensation if their shifts are canceled at the last minute. This move, which is part of a broader update to employment laws, promises to give greater job security to a large portion of the workforce, particularly in sectors such as hospitality, warehousing, and the NHS.

What the Employment Rights Bill Means for Agency Workers

The new bill, which includes 250 provisions, will require employers to offer agency workers contracts with guaranteed weekly hours. Currently, many agency workers are on zero-hour contracts, meaning they are not guaranteed any minimum working hours. The amendment aims to close the loophole that allowed employers to bypass restrictions on zero-hour contracts by hiring agency staff instead.

Paul Novak, the general secretary of the Trades Union Congress (TUC), strongly supported the change, calling it a crucial step in protecting agency workers from unfair treatment. Novak emphasized that a significant portion of the zero-hour workforce is made up of agency workers, and they need to be shielded from exploitative practices. He praised the government for recognizing this issue and taking action to protect these workers.

However, the bill’s provisions do not clarify exactly what constitutes “short notice” when it comes to last-minute shift cancellations. This lack of definition has led to some uncertainty among both employers and workers, with questions about how this rule will be enforced and what qualifies as acceptable notice.

Trade Union Support for the Bill

Trade unions have welcomed the government’s decision to introduce these new protections. The TUC has long been advocating for stronger rights for agency workers, arguing that the rise of zero-hour contracts and other forms of precarious work has undermined job security for millions of people. Novak highlighted the fact that agency workers often face insecure employment with little control over their working hours, which makes them vulnerable to exploitation.

By ensuring that agency workers are offered contracts with guaranteed hours, the bill aims to provide them with more stability and security. This change could lead to better working conditions for many of the estimated one million agency workers currently employed in the UK.

Debate Over Flexibility for Workers

Despite the support from trade unions, not everyone is happy with the bill’s provisions. The Recruitment and Employment Confederation (REC), a body representing the recruitment sector, has voiced concerns that these changes may reduce flexibility for workers who prefer the current agency model. Kate Shoesmith, the deputy chief executive of REC, stressed that while protections for agency workers are important, they must not come at the cost of the flexibility that many workers value.

Some workers enjoy the ability to choose when and where they work, and the introduction of guaranteed weekly hours could limit their ability to take on multiple short-term jobs or adjust their schedules as they see fit. Shoesmith has called on the government to ensure that the new regulations do not undermine the existing rights of agency workers, who may appreciate the flexibility that comes with non-guaranteed hours.

Minimum Weekly Hours and Other Provisions

The new bill stipulates that agency worker contracts must include guaranteed weekly hours, with the number of hours based on the worker’s average hours worked. However, the government has yet to decide whether this will be calculated using a 12-week reference period or a longer period. This decision is still up in the air, but it will have a significant impact on how the new law is applied.

In addition to changes for agency workers, the Employment Rights Bill includes provisions to strengthen penalties for companies that engage in “fire and rehire” tactics. This controversial practice, in which employees are dismissed and then rehired on worse terms, has been widely criticized for undermining job security. Under the new bill, companies found guilty of not consulting employees before rehiring them could face fines of up to 180 days’ pay, double the current penalty of 90 days.

The bill also introduces other key changes, including extending sick pay to workers who earn less than £123 per week from their first day of illness. Currently, workers must be sick for at least three days before they qualify for sick pay. The new rules would provide a more immediate safety net for low-wage workers, ensuring that they are not left without income when they fall ill.

Changes to Union Rules and Potential Challenges

Another aspect of the Employment Rights Bill includes changes to union rules. Workers planning to strike will now be required to give employers 10 days’ notice, down from the previous 14-day requirement. The government also considered lowering the union membership threshold for recognition ballots from 10% to 2%. However, the bill does not specify a new figure, instead giving the secretary of state the power to set the threshold.

These changes have been met with mixed reactions. While trade unions have expressed support for many of the bill’s provisions, some business groups are concerned about the potential impact on small businesses.

Business Groups Express Concern

Business groups have raised concerns about the potential consequences of the Employment Rights Bill, particularly for small businesses. Martin McTague, the national chair of the Federation of Small Businesses (FSB), stated that the majority of its members are deeply worried about the bill’s impact. According to McTague, two-thirds of small businesses plan to stop hiring new employees due to the bill’s provisions, and one-third may reduce their workforce.

McTague also highlighted issues related to sick pay funding and day-one dismissal rights, suggesting that these changes could place a heavy burden on small businesses and hinder their ability to grow. He called on the government to provide more support for small businesses to ensure that they are not negatively impacted by the bill’s provisions.

Conclusion

The UK government’s decision to ban zero-hour contracts for agency workers marks a significant shift in labor policy, aimed at improving job security for millions of workers in sectors like hospitality, warehousing, and the NHS. While trade unions have welcomed the changes, some business groups, particularly small businesses, have expressed concerns about the potential impact of the bill.

As the debate continues, the government will need to balance the need for better protections for workers with the desire for flexibility in the labor market. The full impact of the Employment Rights Bill will become clearer once it is fully implemented.

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