Government Publishes Amendments to the Employment Rights Bill: What REC Members Need to Know

Today the Government published a series of amendments to the Employment Rights Bill, following consultations held last year. The amendments focus on provisions related to zero hours contracts, trade union law, and protections for agency workers. The Bill is scheduled for the Report Stage in the House of Commons next week. The key thing to note is the final details will be determined by secondary legislation and ongoing consultations. As such, the full impact of these reforms will unfold over the coming months and will not be enacted until 2026 at the earliest.

Zero Hours Contracts

The Government’s amendments today mean that agency workers will be covered by the plans to end exploitative zero hours contracts. ?Agency workers will be able to access a contract that clarifies the hours they work and where responsibility lies. However, the government tell us they are keen for their approach to provide flexibility for businesses as well.?

Guaranteed Hours for Agency Workers: Who Is Responsible?

The Government has confirmed that there will be no changes to the rules around transfer fees, as had been suggested during the consultation. This is great news for REC members, as recruiters will still be able to charge fees if a worker accepts a guaranteed hours contract from their client.

Regarding guaranteed hours, the Government has amended the Bill to ensure that the obligation to provide a guaranteed hours offer will generally rest with the end hirer. However, it is important for members to note that flexibility will remain, allowing this obligation to be placed on agencies or other intermediaries in specific scenarios. These scenarios will be clarified through secondary legislation and will be crucial in determining how the new rules will work in practice.

Shared Responsibility for Shift Notices and Cancellations

Both the end hirer and the agency will be responsible for providing agency workers with reasonable notice of shifts, shift cancellations, and changes to shifts. Agencies will also be held accountable for making payments to workers when shifts are cancelled on short notice or when shifts are moved or curtailed – but with provisions to pass these costs on where warranted. For examples, in situations where the hirer is responsible for the change, agencies and hirers may negotiate terms that allow these costs to be recouped from the hirer. Additionally, in the case of pre-existing contracts, agencies will be allowed to recover these costs where the hirer is at fault for the change.

Statutory Sick Pay

The Government has confirmed that all workers will be eligible for Statutory Sick Pay (SSP) from day one. This will be payable at a rate of ￡116.75 or 80% of a worker's regular earnings, whichever is lower. However, the specifics of how this applies to agency workers, such as what counts as “day one” and how regular earnings are calculated, remain undefined. This is an area where the REC will continue to work with the Government to ensure that the final legislation is fair and reflective of the nature of agency work. We’ve made out views on these changes clear in our press release on these issues.

Umbrella Regulation

The Government’s move to regulate Umbrella Companies is a very welcome development and something the REC has been consulting on for many years. Umbrella regulation was not part of the original Plan to Make Way Pay, nor was it included in the original draft of the bill, but thanks to pressure from the REC, formal regulation in this area has now been promised.

By bringing Umbrellas within the scope of the Employment Agencies Act 1973, this will create a level playing field between agencies and umbrella companies in the application of the law. However, the question remains around the timeline for bringing this proposed amendment into reality, and we will push for this to be introduced as soon as possible.

What isn’t mentioned in the amendments?

It is important to note that two areas of concern for the industry, particularly regarding implementation, were not addressed in the amendments.

First of all, the Government’s pre-election promise to introduce a Single Worker Status have not been addressed in this suite of amendments, and will not be considered for some time yet. This is important, and as we continue to work through the practicality of the wider Employment Rights Bill (ERB), REC will continue to ensure no unintended consequences from such a move.

There was also no mention in today’s updates of the Right to Switch Off. This no longer seems to be on the Government’s immediate agenda.

There were also no changes to the government’s proposals around collective consultations for redundancy taking place at one establishment. The current proposal is needlessly broad and needs to be reconsidered to avoid collective consultation requirements becoming too unwieldy to be useful in cases where redundancies are necessary.

Secondary Legislation and Future Consultations

The specific details of what happens next and how will be set out in secondary legislation, which is not yet under development. The Government has emphasised that they will take the necessary time to consult on these regulations to ensure they are clear, detailed, and workable. We would expect formal consultation on these proposals and the required secondary legislation to begin after the bill receives Royal Assent in the summer.

The Government has committed to continue to engage with employer organisations, the recruitment sector, and trade unions to identify the best way to extend rights for agency workers without causing unintended consequences for employment agencies and end hirers. REC will be a key part of this and will also engage with relevant stakeholders outside of the formal consultation process.

What does this mean for REC Members?

For REC members, these changes will mark a potential shift in the way agency workers are treated under UK employment law. However, with the Government’s decision to leave most of the detail to secondary legislation, this gives us ample opportunity to continue to influence things. The Government has repeatedly told us how valuable our input has been, and leaving major details to secondary legislation shows their commitment to keeping a channel open for us to engage further.

The REC will keep members updated with any further developments on the ERB as and when we hear them, but members can contact us at any time at [email protected] to talk about the Bill and our work on it.

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