As part of the Government’s plan to 'Make Work Pay', a consultation on ‘the application of zero hours contract measures to agency workers' has been released. This consultation seeks feedback on how the new measures should be applied to agency workers.
Consultation
The Employment Rights Bill aims to end exploitative zero-hours contracts by introducing new measures, including:
- A right to guaranteed hours (the hours offered will reflect the number worked during a 12-week reference period).
- A right to reasonable notice of shifts and payment for shifts cancelled or curtailed at short notice.
These measures will establish obligations that employers must adhere to.
The Government is seeking views on how the new measures should apply to agency workers, agencies (and umbrella companies, where applicable), and end hirers. A broader consultation on implementing these measures is planned for a later date.
The Government is concerned that if the new measures do not apply to agency workers, employers may use them to circumvent these rights.
- Agency workers have a contract with an employment agency but work under the direction of an end hirer.
- This situation creates a tripartite relationship between end hirers, employment agencies and agency workers, making it challenging to identify employment rights and responsibilities.
Right to guaranteed hours
Under the Employment Rights Bill, employers are required to automatically offer guaranteed hours to certain workers on zero-hours contracts or those with low guaranteed hours in their contracts. The guaranteed hours will reflect the time regularly worked, based on a 12-week reference period. Workers can choose to decline the guaranteed hours and remain on their existing contracts.
The Government is considering whether agency workers should be offered guaranteed hours by either:
- The employment agency.
- The end hirer.
The Government plans to repeal the Workers (Predictable Terms and Conditions) Act 2023, which would have allowed employees to request a predictable work pattern that employers could decline.
Reasonable notice of shifts and payment for shifts cancelled or curtailed at short notice
If employers fail to provide reasonable notice of shifts, workers may bring a case to an employment tribunal to seek compensation for any loss suffered due to unreasonable notice, with some limited exceptions.
The tripartite relationship between the worker, the agency, and the end hirer (and potentially further parties) makes it difficult to determine where responsibilities for these rights should lie. The consultation has proposed that:
- Both the end hirer and the agency should be responsible for providing reasonable notice of shifts
- Agencies should be responsible for compensating agency workers for shift cancellations, alongside their other payments.
- The agency should be able to recoup the cost from the hirer if the hirer was responsible for the cancellation or curtailment of the shift.
The Government is seeking views on whether legislation should be introduced to ensure agencies can recover these costs from end hirers when the hirer is responsible for short-notice cancellations.
Consultation
The consultation closes on 2 December 2024. Responses can be submitted online, by e-mail or via post.
Useful guides on this topic
Agency Workers: Employment intermediaries rules (subscribers)
What are the tax rules for Employment Intermediaries and Agencies? Are agency workers subject to PAYE?
Off-Payroll Working: At a glance
What is Off-Payroll Working? What is IR35? What are the tax rules for Off-Payroll Working or IR35? How do you check employment status? What is a personal service company?
Personal Service Company (PSC) tax
What is a PSC? What are the tax implications for a PSC and its owners?
External link
Department for Business and Trade:Making Work Pay: the application of zero hours contracts measures to agency workers
Government Bill: Employment Rights Bill
Consultation questions
Consultation questions
Background questions
Q1: Are you (please select from the following):
- Business representative organisation, trade body
- Trade union or staff association
- Think tank or academic
- Employer
- Individual
- Legal representative
- Other (please specify)
Q2: If you are an employer or individual, what is your role or the role of the organisation that you work for (please select from the following)?
- End hirer of Agency Workers
- Employment Agency
- Umbrella Company
- Agency Worker
- Other (please specify)
Q3: If you are an employer or individual, what type of organisation (do you work for) (please select from the following)?
- Private sector organisation
- Public sector
- Charity/voluntary sector
- Other (please specify)
Q4: If you are an agency, an umbrella company or an end hirer of agency workers, how would you describe the size of your entire organisation?
- Micro (1-9 workers)
- Small (10-49 workers)
- Medium (50-99 workers)
- Large (100-249 workers)
- Very large (250+ workers)
Q5: Do you think the guaranteed hours should be offered by the employment agency (option 1) or the end hirer (option 2)?
- Option 1, guaranteed hours should be offered by the employment agency
- Option 2, guaranteed hours should be offered by the end hirer
Q6: Should end hirers be required to pay a transfer fee or use an extended hire period if they are required to offer guaranteed hours to an agency worker?
- Yes
- No
- Don’t know
- Please explain your answer
Q7: If you think there are other factors specific to agency workers that need to be taken into account in applying the new right to guaranteed hours to them, please explain them here.
Q8: Do you agree that the responsibility for providing an agency worker with reasonable notice of shifts should rest with both the employment agency and the hirer, so that where a tribunal finds that unreasonable notice was given, it will apportion liability according to the extent that the agency and the hirer are each responsible for the unreasonable notice?
- Yes
- No
- Don’t know
- Please explain your answer
Q9: Do you think that legislation should prescribe how the end hirer should notify the agency that they have a shift available and of changes to these and when notification should be deemed to be received?
- Yes
- No
- Don’t know
- Please explain your answer
Q10: If you think there are other factors specific to agency workers that need to be taken into account in applying the new right to reasonable notice of shifts to them, please explain them here.
Q11: Do you agree that the agency should be responsible for paying any short-notice cancellation or curtailment payments to an agency worker?
- Yes
- No
- Don’t know
- Please explain your answer
Q12: Do you think that the agency should be able to recoup this cost from the end hirer if/to the extent that the end hirer was responsible for the short notice cancellation or curtailment?
- Yes
- No
- Don’t know
- Please explain your answer
Q13: If you think that the agency should be able to recoup this cost from the end hirer, do you think the Government should legislate to ensure that the agency can recoup the costs?
- Yes
- No
- Please explain your answer
Q14: Do you think that it should be possible to override legislative provisions allowing agencies to recoup cancellation/curtailment costs through contracts signed after implementation (or that are clearly entered into in contemplation of the commencement of the legislative provisions)?
- Yes
- No
- Please explain your answer
Q15: If you think there are other factors specific to agency workers that need to be taken into account in applying the new right to payment for short notice cancellation or curtailment to them, please explain them here.
