Flexible work ‘jeopardised’ by end of zero hour contracts

Jacob Grattage, Reporter, Business & Accountancy Daily. Croner.

Fierce lobbying against plans to curb use of zero hours contracts as government warned proposals risk changing the employment status of workers if agencies included.

An open letter to the government from eight professional bodies, including the Recruitment and Employment Confederation (REC), Association of Professional Staffing Companies APSCo, and Freelancer and Contractor Services Association (FCSA) is calling for a rethink on plans to extend zero hours reforms to temporary agency workers.

The group argues temporary agency work is ‘fundamentally different from other forms of zero hours employment’, point to the unintended consequence of shifting the employment status of agency workers.

In 2024, around 872,000 temporary or contract workers were on assignment on any given day, according to REC’s UK Recruitment Industry Status Report 2024/25.

The government’s zero-hour contract changes include a new guaranteed hours plan ranging from an eight to 20-hour threshold with a new ‘reference period’, reasonable notice for shift changes, as well as payment for late cancellation of shifts.

The framework will apply to agency workers, pre-empting a potential ‘loophole for employers to avoid the new legislation,’ the government stated in the consultation.

This has raised major concerns across the agency community, with the group of eight now writing to Kate Dearden, future of work minister at the Department for Business & Trade (DBT).

The signatories called on the government to ‘pause and reconsider the specific application of guaranteed-hours proposals to temporary agency work’, particularly while the wider agency work regulatory framework remains under review.

‘For many agency workers, flexibility is not something imposed upon them, it is a key reason they choose agency work,’ the group stressed.

Pointing to research by the DBT itself which found 63% of agency workers said their work was ‘well suited to them’, the group said the plan ‘raises an important question about whether the proposed framework is addressing a problem that exists’.

In particular, the group warned of four unintended consequences.

Firstly, the proposals could affect workers’ employment status, warning: ‘In the vast majority of cases, the worker will no longer be a “worker” for employment rights purposes and will need to be moved to a contract of service.’

There is also a risk of ‘significant’ administrative burdens as ‘businesses would be required to monitor working patterns across rolling reference periods, identify qualifying workers, calculate guaranteed hours entitlements, make repeated contractual offers and manage extensive compliance obligations’.

There would also be ‘fewer opportunities for workers to access flexible assignments’, and the proposals do not reflect the reality of business operations.

‘Businesses engage temporary workers because they require flexibility. Many hirers have no permanent vacancy to fill. They simply require additional labour for a defined period’.

Instead of strengthening worker protections, ‘guaranteed hours provisions will not apply to genuinely self-employed workers. This creates a significant incentive for some businesses to restructure labour arrangements in order to avoid the legislation’.

There are also concerns that the latest agency proposals are being put forward before the government has responded to the recently closed consultation on reforming the regulatory framework for agency work, making it ‘difficult to assess how the proposed guaranteed hours framework would interact with the wider regulatory regime for agency work’.

The group is calling for a meeting with the minister to discuss their concerns as a matter of urgency.

Chris Bryce, chief executive of Freelancer and Contractor Services Association, warned: ‘Agency work is fundamentally different, and these rules risk jeopardising flexible work opportunities for people who actively choose that flexibility.’

In the zero hours consultation, it was clear exclusions would be extremely limited, with the government stating ‘one [excluded] group could be workers who have more than one contract with the same employer and one of these contracts exceeds the hours threshold’.

Useful links

Letter from industry leaders

Government consults on end of zero hour contracts | 2 Jun 2026