REC Responds to the Government's Guaranteed Hours Consultation

The REC has submitted a comprehensive 15,000-word response to the Government's consultation on guaranteed hours and zero-hours contract reforms. The submission was updated following the publication of significant new Government data, impact assessments and supporting evidence.

Why we are concerned

At a time when employers are facing significant economic and labour market pressures, these reforms must be carefully designed and managed. The REC believes the proposals risk reducing employment opportunities, discouraging flexible work and pushing some activity into less regulated forms of work, ultimately leaving workers with fewer opportunities and protections.

The Government's own impact assessment estimates that reforms to zero-hours contracts could cost businesses up to £2.9 billion. At the same time, it acknowledges that the wider impact on labour market flexibility, hiring decisions and economic growth has not been fully quantified.

For employers across the economy, flexibility is essential to managing changing demand, seasonal pressures and short-term projects. Restricting that flexibility risks increasing costs, reducing productivity and limiting growth.

Agency workers should be exempt

Our view is clear: guaranteed hours provisions are not appropriate for genuine temporary agency work.

Agency work operates fundamentally differently from the employment relationships these reforms were designed to address. It is based on fluctuating demand, temporary assignments and a tripartite relationship between workers, employment businesses and hirers.

Applying guaranteed hours requirements to agency work would create significant complexity, cost and administrative burden while offering limited benefit to most agency workers. The consultation leaves major questions unanswered about how the proposals would work in practice and where responsibilities would fall.

Protecting flexibility that workers value

Many agency workers actively choose temporary work because it helps them balance employment with study, caring responsibilities, health conditions, phased retirement and other commitments. Agency work also provides an important route into employment for people who might otherwise struggle to enter or remain in work, including many young people.

For employers, agency workers provide access to skills and labour when demand changes. That flexibility is particularly important in public services, where NHS organisations, local authorities and schools rely on agency workers to manage workforce shortages and fluctuating demand.

Reducing flexibility will not increase workforce capacity. Instead, it risks reducing work opportunities while increasing costs and bureaucracy for organisations already under pressure.

If the Government proceeds, the proposals must be made more workable

While the REC strongly believes agency workers should be excluded from guaranteed hours provisions altogether, our response also sets out recommendations should the Government decide to proceed.

These include:

• A 52-week reference period to reflect the seasonal and fluctuating nature of agency work.
• An eight-hour low-hours threshold so very short or occasional assignments are not inadvertently captured.
• Proportionate notice and compensation requirements for cancelled shifts.
• Employment businesses, rather than hirers, being responsible for making guaranteed hours offers, reflecting existing legal responsibilities and avoiding unintended consequences for clients.

Implementation must be phased

If agency workers remain within scope, implementation must be delayed until at least 2028 to give employment businesses, recruiters and hirers sufficient time to adapt systems, contracts and processes.

Agency work involves complex tripartite relationships, multiple assignment types and fluctuating demand patterns. These factors make implementation significantly more complicated than for direct employment.

What's next?

The REC will continue to engage closely with government, parliamentarians and stakeholders as the consultation process moves forward. Our focus will be on building support for our concerns, protecting labour market flexibility and ensuring the recruitment industry is recognised as a key partner in delivering growth, workforce participation and resilient public services.

We will continue discussions with ministers and officials, engage MPs across all parties and work with members to provide evidence of the value that temporary work brings to workers, employers, public services and the wider economy.

Read the full response below.