On 2nd June, the government launched its consultation on guaranteed hours, officially (and confusingly) titled “Ending one-sided flexibility: reforms of zero hours and similar contracts.” Despite the zero-hours-sounding name, this targets all businesses that engage temporary or agency workers – not just those on zero hours contracts – with implementation due in 2027 and the consultation closing on 25th August. If you supply or hire temporary workers, this affects you, and the clock is already ticking.

A Name That Hides Its True Scope

No one who uses temporary workers would necessarily realise this consultation affects them (unless they already use zero hours or similar contracts) simply because of its name. In reality, it targets all businesses that engage temporary or agency workers, regardless of contract type. In other words, it will affect every hirer of any kind of temporary worker, and every worker supply agency in the UK.

This follows the Employment Rights Act 2025, which requires regulations to implement new requirements already on the government’s books for 2027. The details are up for discussion now, so the necessary regulations can be made in readiness for full application next year – which means there’s very little time, and certainly none to waste, with the consultation closing on 25th August.

Let’s be clear about the scale, too. For agencies, this could well be far greater than the Agency Worker Regulations (AWR). The industry survived the AWR wave in 2011, but this new onslaught is set to be more of a tsunami, carrying away much in its path. Here’s why, for both agencies and hirers.

“One-Sided Flexibility” and the 74% Who Are Happy Anyway

The proposals contain a number of concepts apparently designed to stop what’s referred to as “one-sided flexibility”, namely, where agency workers are signed up to contracts that require them to be available for work, but where the hirer has no obligation to provide work or pay when work isn’t available. This kind of arrangement leaves workers with very little security, and so is arguably unfair.

However, while there are no doubt some instances where this kind of arrangement exists, the government’s own agency work survey 2021, which it relied upon when conducting the recent review of the Agency Conduct Regulations, indicates that some 74% of agency workers are happy with their agency arrangements. Yet the consultation brings all agency workers into scope, leaving it to the industry to make the case for exclusion.

What Would Agencies Want to Be Excluded From?

Apart from liability for giving late notice of changing shifts, the answer is the obligation on hirers to offer direct contracts to agency workers with “guaranteed hours” after a reference period, which the government says it prefers to be a short 12 weeks.

The Anti-Avoidance “Giant” Nobody’s Talking About

While the guaranteed hours obligation is clearly a bit of a monster, given its impact on the value of bookings and on both transfer and placement fees, the real giant that no one seems to be talking about is the anti-avoidance proposal.

Here’s the issue: since hirers won’t necessarily feel drawn to the obligation to offer direct work to the agency workers they use, they may choose to terminate an assignment before the 12-week period is reached. So, to stop clients from avoiding their obligations, the proposal is that because a hirer terminating an assignment may be doing so for avoidance reasons, the worker would have a right to bring a claim, potentially in the employment tribunal.

In shorthand, any termination of an assignment could lead to a tribunal claim, regardless of the reason, leaving the tribunal to determine whether the termination was or wasn’t reasonable in all the circumstances. It’s an open question whether hirers will stomach this, and what the impact will be on agency worker supply; but it’s guaranteed that this won’t encourage growth in the supply industry, or in business generally.
What Can Be Done? Three Steps to Protect Your Business

1. Respond to the Consultation With Vigour
   
   Recruitment businesses must respond to the consultation with vigour. There can be no sleepwalking on this issue and this is not scaremongering. Trade associations such as the Association of Recruitment Consultancies (ARC) must be given the data, from recruitment businesses like yours, to show the impact on your business. The figures will be necessary to show downward pressure on growth, if that’s what people believe will be the result. Trade organisations will be able to identify the likely fallout and unintended consequences from the feedback they receive, and there’s already plenty to name.
   
2. Get Your Hirers Involved
   
   Hirers must participate in the same way. Recruiters should be informing their clients of the plans and obtaining evidence from those hirers on the impact to their business. That evidence should ideally be shared too, to demonstrate the wider consequences.
   
3. Capture the Impact on Real Lives
   
   The impact on real lives should be considered. If, while trying to help one kind of vulnerable person, the legislation is in fact detrimental to another; for example, jobs for school leavers and young people trying to get into the jobs market, this needs to be identified and supported with evidence. Recruiters are in an ideal position to capture this kind of impact and relay the potential fallout before it happens.

Get Ahead of It: Join Us at Lawspeed’s July Seminar

This consultation might have landed under a snooze-worthy name, but “guaranteed hours” and the anti-avoidance proposals (could be: “Hirers to face tribunal claims from agency workers”) behind it represent one of the biggest shifts facing temporary recruitment ever.Hirers often use agencies to supply because of the key principle that workers have few direct rights to claim against hirers.

Lawspeed is running a dedicated seminar in London on 7th July on the Employment Rights Act 2025 ‘zero hours’ consultation, covering exactly what guaranteed hours, the 12-week reference period, and the anti-avoidance proposals could mean for your agency and your clients; plus practical steps you can take before the consultation closes on 25th August.

To take part in this informative discussion with your peers, and learn what you can do, book your place at Lawspeed’s July seminar today.