Zero hour contract ban to include agency workers in employment bill

BBC News

04-03-2025

Agency workers will be included in a ban on "exploitative" zero hour contracts as part of ammendments to the government's employment reform bill, the BBC understands.The new rules will mean that agency workers will have to be offered a contract guaranteeing a minimum number of hours each week.It is one of a number of additions to the Employment Rights Bill which will be outlined on Tuesday. While unions welcomed the inclusion of agency workers in the ban, the Recruitment and Employment Confederation (REC), which represents the sector, said the change should not "undermine" the "flexibility" that zero hour contracts offer some workers.
Agency workers who choose to be on zero hour contracts will also be made eligible for compensation if their shifts are changed at short notice, it is understood.Although the amendments will not spell out what "short notice" means.There are around one million agency staff in the UK, working across areas such as warehouses, in hospitality and within the NHS.The Labour government pledged last year to ban "exploitative zero hours contracts" as part of the Employment Rights Bill.The minimum hours offered in a contract to agency workers will be calculated according to the average number of hours they normally work.The BBC understands that the government is yet to decide whether this will be based on a 12-week reference period or longer.Trade unions have been campaigning for agency workers to be included in the legislative changes to prevent employers getting round the proposed zero hours rules by hiring agency staff. Paul Novak, general secretary of the Trades Union Congress, said the government was right to close this "loophole".He said agency workers "make up a significant proportion of the zero hours workforce and need protections from bad working practices too".But the REC said it was concerned about the change.Its deputy chief executive, Kate Shoesmith, said people choose agency work "for the flexibility it provides at a time and stage in their life" and that the new rules must not undermine that.She added that time should be given "to ensure any legislative changes do not conflict with existing and hard-won protections for agency workers". The REC would "keep working with the government to ensure that," she said.
"Fire and rehire"
The BBC understands that the government will table 250 amendments on Tuesday. They will include doubling of the penalty imposed on companies that engage in so-called "fire and rehire'' practices.This means that if they fail to properly consult employees before dismissing and then rehiring them on less favourable terms, they could be forced to pay the worker 180 days' worth of pay in compensation up from the current 90 day penalty payment.The amendments also contain a commitment to extend sick pay to workers earning under £123 a week from the first day of their illness.They will be entitled to 80% of their average weekly earnings or statutory sick pay - which is currently £116.75 per week – whichever is lowest.Currently, to qualify for statutory sick pay, a worker must have been ill for three days in a row.There will also be changes to rules around trade union recognition and the ability of unions to take industrial action.The government is proposing that workers will have to give their employers 10 days' warning of any strike action – rather than the existing 14 days' notice.Currently, there can be a ballot for union recognition if 10% of the workforce is a member of a union.The government had been consulting on lowering it to 2% but the proposed amendment will not state a figure and will simply give the secretary of state the power to lower the 10% threshold.Mr Novak said the changes were about ''creating a modern economy that works for workers and business alike'' and that driving up standards "will stop good employers from being undercut by the bad, and will mean more workers benefit from a union voice".Several business groups have been critical of the government for not providing more detail about how the legislation will work in practice.They are unlikely to be satisfied by what's in the amendments.Craig Beaumont, executive director of the Federation of Small Businesses, said that "anyone hoping to see government take serious account of the concerns of small employers looks likely to remain disappointed for the time being".He said: "There is a huge gulf between the stated aims of this bill and the real world negative impact on jobs and growth."