Agency Worker Rights: Changes You Need to Know About

The UK Government is making significant changes to employment law that could impact your business if you hire agency workers. These changes form part of the new Employment Rights Bill and introduce new protections for agency staff, including compensation for cancelled shifts and guaranteed minimum hours.

This guide breaks down what you need to know, how it might affect your company and what steps you should take.

What’s Changing?

1. Compensation for Cancelled Shifts

Agency workers on zero-hour contracts will now be entitled to compensation if their shift is cancelled or changed at short notice. However, the Government has yet to define ‘short notice.’

2. Guaranteed Minimum Hours

Employers must offer agency staff a contract guaranteeing them a minimum number of weekly hours. This is based on the average hours they typically work, though the reference period is also yet to be confirmed.

3. Stronger Protections Against ‘Fire and Rehire’

For businesses dismissing and rehiring employees on worse terms without proper consultation, the financial penalty has doubled - from 90 to 180 days’ pay.

4. Expanded Sick Pay

Workers earning less than £123 per week will now qualify for sick pay from day one of their illness. They will receive either 80% of their average weekly earnings or statutory sick pay - whichever is lower.

5. Changes to Industrial Action

The notice period for strike action will be reduced from 14 to 10 days. The Government may also lower the threshold for union recognition, making it easier for workers to demand representation.

How Could This Affect Your Business?

Depending on how you operate, these changes could bring challenges and benefits to your business.

Potential Challenges

One of the primary challenges for small firms will be budgeting for compensation payments should they need to cancel shifts due to unforeseen circumstances. If your company relies on agency workers for periods of fluctuating demand, minimum hour contracts may make your operations less flexible.

An increased compliance burden could lead to more time spent reviewing contracts, updating policies and ensuring compliance with new rules.

Possible Benefits

On the plus side, guaranteed hours may lead to better staff retention when using agencies. Improved worker protections also enhance your reputation as a fair employer, boosting brand trust.

Actions You Should Take

To remain compliant and protect your business, consider taking the following steps:

1. Review Your Use of Agencies

Assess whether you rely on zero-hour agency staff and how often you cancel shifts. Plan to limit last-minute schedule changes that could trigger compensation.

2. Update Employment Contracts

Work with your agencies to ensure new minimum-hour contracts are in place, and adjust your policies on shift cancellations to reduce your liability.

3. Budget for Increased Costs

Factor in potential compensation payments and additional sick pay entitlements when planning payroll.

4. Stay Informed on New Details

The Government has not yet finalised all aspects of these employment law changes. Keep an eye on official updates and be ready to adjust your approach.

5. Seek Professional Advice

If you're unsure about compliance, consult an HR expert to explain how the new rules will affect your unique circumstances.

Signing Off

While these changes aim to protect agency workers, they will also put some pressure on small business owners to adapt. By preparing ahead of time, reviewing your procedures and budgeting accordingly, you can stay compliant while continuing to run efficiently.

Secure Business Insurance

Choosing the right Business Insurance is essential to effective risk management when using external agency staff. Compare providers to assess coverage options, consider specialised coverage needs and review policy terms and exclusions.

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