How Will the Ban on Zero-Hours Contracts Impact Agency Work?

The UK government’s proposed ban on exploitative zero-hours contracts, set to include agency workers, marks a significant shift in employment practices. While intended to provide greater security and fairness for workers, these changes may have profound implications for agency work and the flexibility it offers. In this blog, we explore how the ban could affect agency work if implemented and what businesses and workers can expect moving forward.

What Are Zero-Hours Contracts?

Zero-hours contracts are agreements between employers and workers where no minimum hours are guaranteed. Workers are typically “on call” to work as needed, but employers are not obligated to provide consistent hours. These contracts have been widely used in sectors like hospitality, healthcare, and logistics due to their flexibility. However, they have also been criticized for leaving workers vulnerable to income instability and unpredictable schedules🔗.

The Proposed Ban on Zero-Hours Contracts

The Employment Rights Bill aims to address exploitative practices associated with zero-hours contracts. Under the new proposals:

• Guaranteed Weekly Hours: Employers will need to offer agency workers a contract guaranteeing a minimum number of hours per week based on their regular working patterns during a reference period (expected to be 12 weeks)🔗.
• Compensation for Short-Notice Changes: Workers will be entitled to compensation if shifts are canceled or changed at short notice🔗.
• Reasonable Notice of Shifts: Employers must provide adequate advance notice of shifts, reducing last-minute scheduling🔗.

These measures aim to close loopholes that allow employers to bypass fair working practices by hiring through agencies instead of directly employing workers🔗.

How Will This Affect Agency Work?

1. Reduced Flexibility for Employers

Agency work has traditionally provided businesses with the ability to adapt quickly to fluctuating demands. The ban on zero-hours contracts introduces stricter conditions that may limit this flexibility. Employers will need to plan staffing more carefully and may face challenges in filling unexpected gaps🔗.

2. Increased Costs for Agencies and Employers

The obligation to offer guaranteed hours and compensate workers for canceled shifts will likely increase costs for both agencies and end hirers. Agencies may need to renegotiate contracts with clients or absorb additional expenses, which could impact profitability🔗.

3. Greater Security for Workers

For agency staff, the reforms promise improved job security and income stability. Workers who regularly work consistent hours will benefit from guaranteed contracts that reflect their actual working patterns🔗.

4. Potential Shift Toward Permanent Employment or Self-Employment

Some industry experts warn that stricter regulations could lead employers to reduce reliance on agency workers altogether, opting instead for permanent hires or outsourcing tasks to self-employed contractors🔗.

Opportunities Amidst Challenges

While there are concerns about unintended consequences, the reforms also present opportunities:

• • Improved Worker Retention: Offering guaranteed hours and fair treatment may enhance worker loyalty and retention rates in sectors reliant on temporary staff🔗.
• • Ethical Recruitment Practices: Agencies adhering to these new standards can position themselves as ethical employers, attracting top talent and building trust with clients🔗.
• • Better Workforce Planning: Employers can use this opportunity to develop more strategic workforce models that balance flexibility with fairness🔗.

Preparing for Change

Businesses and agencies must adapt proactively to these upcoming changes:

• • Review Current Contracts: Assess existing zero-hours arrangements and identify areas where guaranteed hours can be introduced.
• • Enhance Workforce Planning: Develop robust staffing strategies that account for predictable demand while maintaining some level of flexibility.
• • Communicate with Stakeholders: Engage with workers, clients, and industry bodies to ensure smooth implementation of new policies.
• • Invest in Technology: Workforce management tools can help optimize scheduling, monitor hours worked during reference periods, and comply with new rules effectively.

The inclusion of agency workers in the ban on exploitative zero-hours contracts is a landmark development in UK employment law. While it promises greater security for workers, it also challenges the traditional flexibility associated with agency work. Businesses must adapt thoughtfully by balancing compliance with operational needs.

As the Employment Rights Bill progresses through Parliament, agencies like Everest Recruitment are well-positioned to support businesses in navigating these changes while maintaining ethical recruitment practices and delivering tailored workforce solutions.

For more information or assistance in preparing your workforce strategy under the new framework, contact Everest Recruitment today! Together, we can build a fairer, more sustainable future for agency work.