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UK government opens consultation on zero-hour contracts for agency workers

UK government opens consultation on zero-hour contracts for agency workers

October 22, 2024

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As part of the Labour government’s ‘Make Work Pay’ plan, the government is introducing measures to tackle one-sided flexibility in zero-hours contracts, and yesterday, it launched a consultation seeking views on the application of measures to tackle one-sided flexibility in zero-hours contracts to agency workers.

The government plans to tackle zero-hours contracts through a right to guaranteed hours with a contract that reflects the number of hours regularly worked and a right to reasonable notice of shifts with payment for shifts cancelled or curtailed at short notice.

The consultation seeks views specifically on the application of these two measures to agency workers so responses from stakeholders can help to inform the government’s approach to legislation on this point.

The government will consult at a later date on the implementation of these two measures more generally.

The consultation comes after the publication of the Employment Rights Bill earlier this month.

“We recognise that for a lot of businesses, using agencies is vital for remaining agile and flexible in a competitive market. Indeed, there are around one million temporary agency workers in the UK. Temporary agency work is also worth around £34 billion to our economy,” the consultation states.

The consultation highlighted that as of March 2024, there were around 1,030,000 employees on zero-hours contracts in the UK, according to ONS (Office for National Statistics) figures. As of March 2024, there were approximately 900,000 agency workers, of whom approximately 140,000 also stated that they were employed on a zero-hours contract, according to a Department for Business and Trade analysis of ONS data.

It is seeking views on several areas to inform the government’s next steps, with the potential to bring changes through the Employment Rights Bill, including how to apply the measures on zero-hours contracts to agency workers.

Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry said in a press release, “These consultations are a crucial opportunity for government to engage with businesses to get these reforms right. The bill represents a generational change to our labour market. But we need to remember that the flexible British jobs market is one of our biggest economic strengths – the cost in poorer growth and unemployment of getting things wrong should not be ignored.”

Carberry continued, “We’re particularly pleased that the government has launched a specific agency work consultation – it’s a vital route to work for lots of workers and helps firms react to changing conditions.”

“We will use the consultation process on the provisions around zero-hours contracts (ZHCs) to ensure the government understands the difference between exploitative ZHCs and well-regulated agency work,” Carberry continued. ”Agency workers are among the best-protected people in our labour market, with protection from two different sets of Regulations and a specific Employment Agencies Act, with enforcement by a statutory regulator. And by working with an agency, workers always have someone looking out for them on a client site.”

Dave Chaplin, CEO and founder of contracting authority ContractorCalculator, said, “The launch of today’s consultation Making Work Pay: the application of zero hours contracts measures to agency workers is crucial to ensuring the success of the Employment Rights Bill. Unless agency workers are included, exploitative firms could very easily circumvent the flagship measures designed to tackle one-sided flexibility.”

“The question isn’t whether agency workers should be included, the question is how to ensure they are included,” Chaplin said.

“Agency worker engagements must be included in the Employment Rights Bill to shut an obvious loophole but legislate early to provide the market with an 18-month lead time for firms to implement the necessary scheduling tools to help manage the new legislative requirements,” Chaplin continued. “Thoughtful planning can ensure both worker protection and business adaptability, whilst also not placing unnecessary barriers between firms and the self-employed.”

The Consultation can be found here.