End hirers and employment agencies must take note of ERB agency worker amendments

Joe McMorrow was commenting following the government’s recently published response to a consultation (24 pages/340 KB) on the application of zero hours contracts measures to agency workers and the latest amendments to the Employment Rights Bill (ERB) (215 pages/1.7 MB).

The government has committed to ensuring that agency workers receive guaranteed hours contracts, reasonable notice of shifts, and proportionate payment for shifts that are cancelled, curtailed, or moved at short notice. This is an extension to the applicability of the new rights applicable to directly employed workers under the ERB, with it now clear that these will extend to agency workers too.

The response states that these rights should extend to agency workers to “offer them certainty of hours and security of income but to also ensure that agency work does not become a loophole in the plans to end exploitative zero hours contracts”. The amendments will introduce several important responsibilities for both employment agencies and end hirers.

McMorrow said: “Existing end hirers, or those considering the option of using an agency, should familiarise themselves with the new duties. They should audit their arrangements and assess the impact of the new rights. Any new or changed terms from their agency should be reviewed carefully, so that end hirers fully understand their position.”

End hirers will be primarily responsible for offering guaranteed hours to agency workers who are on zero hours or low hours contracts. The guaranteed hours measure aims to prevent employers from circumventing the new rules by hiring agency workers instead of permanent staff. Both employment agencies and end hirers will share the responsibility of providing workers with reasonable notice of shifts, with employment agencies responsible for making payments to agency workers if their shifts are cancelled or curtailed at short notice. However, agencies have the right to recoup these costs from end hirers if the hirer was responsible for the cancellation.

McMorrow said: “While agencies will be responsible for making payments to compensate workers for breaches of certain new rights, which may have a practical advantage if workers are already on the agency’s payroll, they are likely to pass on these additional costs to the end hirers. Indeed, the government plans to give agencies the right to recoup the cost of any short notice cancellation, movement or curtailment payments where they have pre-existing arrangements with hirers at the time the new provisions come into effect.”

The amendments also allow for collective agreements to contract out of the rights to guaranteed hours and reasonable notice of shifts. This means that employers and independent trade unions can negotiate terms, provided these new terms are incorporated into worker contracts.

The consultation revealed strong support for these changes from various stakeholders, including employers’ organisations, the recruitment sector, and trade unions. The amendments aim to ensure that agency workers receive fair treatment in the workplace, with the goal to extend rights to agency workers without disrupting reputable businesses and to ensure that the employment market remains dynamic and inclusive.