Preparing for fundamental reform of agency worker hiring

It is expected that these will be 12 weeks. A longer reference period could be better for businesses and enable them to show that agency workers are required for varied hours and for short term projects. Many engagements may be for just less than 12 weeks given the additional pay available to agency workers after 12 weeks of an assignment, and so a reference period of more than 12 weeks would mean fewer agency workers are caught by the new provisions. However, it is worth noting that that the Government’s ongoing consultation is also considering whether to make changes to the length of the 12 week Agency Workers Regulations qualifying period in an assignment.

These are all things which the government will be consulting about and you may wish to consider. Think about the agency workers you have used or supplied over the past year (or a shorter period if that makes sense for your business). Identify how long they worked for the hirer, how many hours they worked each week and whether there was a regular working pattern.

Would a requirement to offer these workers a guaranteed contract cause concerns for your business? Put these concerns in your consultation response, explaining why you need a contingent workforce in these scenarios.

Are there any particular types of agency workers working in your business where guaranteed hours contracts would be difficult, perhaps due to the unpredictable nature of the work or other factors?

For example, the Local Government Association has argued that on-call firefighters providing emergency cover should be “excluded workers” (so that a similar obligation in the ERA 2025 to offer a guaranteed hours contract to zero hour workers would not apply to them), arguing that the work is unpredictable, making it very difficult to see how guaranteed hours could be provided.

Hirers should think about the particular types of situation where they only have a temporary need for work and feed this into their consultation response. The government is required to consult specifically about seasonal workers, so think about those, but in what other circumstances might you need to be able offer a fixed-term contract as you only have a temporary need for the worker? Think about the sector your business operates in and push for a wide definition of “temporary need”. If a fixed-term contract is offered, it must expire at the point when the hirer reasonably considers that its temporary need will end. That suggests it will not be possible to decide on a term simply to ensure the employee does not acquire the necessary six months’ service to bring an unfair dismissal claim.

It is likely that it will be possible to offer seasonal workers fixed-term contracts under the “temporary need provisions”, at least in some circumstances. Hirers and provider of seasonal workers will want to push for regulations which expressly allow fixed-term guaranteed hours contracts for seasonal workers and for a wide definition of a seasonal worker. It is worth noting that limited-term contracts are also permitted if they are reasonably needed to perform a specific task or until the occurrence of an event (and the contract ends when that task has been performed/on the occurrence (or non-occurrence) of the event).

Provided that the guaranteed hours contract employees genuinely score the lowest after applying objective selection criteria and following a fair redundancy process, it should be possible to dismiss guaranteed hours contract employees. However, they should not be selected because they are guaranteed hours contract employees as such a dismissal is likely to be automatically unfair. Hirers might want to push for reassurance that a genuine redundancy process can be run if offering guaranteed hours contracts results in them having too many employees.

As hirers will need to assess at the end of each reference period whether their agency workers meet the necessary criteria in terms of hours worked and regularity to qualify for a guaranteed hours offer, hirers will want to push for a longer period for making the offer. They may also need to assess whether they can make an offer of a fixed-term contract and so will need time to consider this. We suggest a month would be a reasonable period within which to make the offer but fear the government may be considering a shorter period.

The government has the power to make regulations requiring that the offer set out the days and times when the hours are to be provided/worked or a working pattern of days and times by reference to which the hours are to be provided/worked (and which must reflect the days/times/pattern worked in the reference period). However, if it chooses not to exercise that power it is not clear what sort of information the government envisages should be included in terms of when the offered hours are to be provided/worked. You should push for clarity on what is required and ideally for as much flexibility as possible.

Work-finding agencies who consider that an agency worker might qualify for the right to a guaranteed hours offer will have to provide information to agency workers about their potential right within two weeks of the arrangement with the hirer starting. Agencies will likely want the government to produce template information documents in the same way as it has produced template Key Information Documents.

This seems to be permissible under the ERA 2025 as pay terms in the guaranteed hours offer are linked to those that applied during the reference period in which they qualified for a guaranteed hours contract. Hirers may wish to seek clarity on this from the government during the consultation.

There is no requirement under the ERA 2025 for employees on guaranteed hours contracts to be offered the same terms and conditions as the hirer’s existing employees. However, hirers need to be aware of the risk of indirect discrimination claims, for example on ground of sex or race. Similarly, where their guaranteed hours employees are on fixed-term contracts they need to consider the rights of fixed-term employees not to be treated less favourably than comparable permanent employees. Hirers would need to be able to objectively justify the different terms on non-discriminatory grounds.

The anti-avoidance provisions apply where the sole or main purpose of the arrangements is to prevent the agency worker from qualifying for the right to be offered a guaranteed hours contract. This test would seem to be met in the above scenario and so there seems to be a wide scope for agency workers to make such arguments. You may wish to push the government to limit the scope of the anti-avoidance provisions so that they do not affect bona fide contingent operations.

The remedy available in such cases is a declaration and compensation for financial loss subject to a cap to be specified in regulations (although there will be a duty to mitigate loss), so the level of exposure for hirers and work-finding agencies is not currently known.

There is no reason to think that agency workers who are already employed by someone else, such as an umbrella company or employer of record, do not qualify for these rights. So unless the government provides for them to be “excluded agency workers” they will be entitled to a guaranteed hours offer. If a guaranteed hours offer is accepted, the parties are treated as entering into the guaranteed hours contract on the day after the worker gives notice of acceptance. However, the agency worker and hirer may agree that the contract takes effect at a later date, so this would make sense where the agency has to give notice to their current employer. Nevertheless, this does appear to be an area for disputes to arise and is another area for further clarity to be sought from the government.