Government releases additional evidence ahead of guaranteed hours consultation deadline

The Government has published a substantial package of evidence and supporting documents alongside its consultation on guaranteed hours and wider reforms to zero-hours and low-hours contracts. 

With the consultation closing on 25 August, there is limited time to consider the new material and respond. While the publications do not introduce any new policy decisions, they provide important insight into how the Government is assessing the potential impact of the reforms and where it believes the case for intervention is strongest. 

For recruiters, the documents are important reading. They highlight concerns about insecurity for some workers, but also expose significant evidence gaps, particularly around agency work, while acknowledging the potential costs and administrative burdens that could arise from the new regulations. 

The REC policy team has reviewed the documents in detail and will update its consultation response to address the key issues and evidence presented. We encourage members to review the material and consider reflecting relevant points in their own responses to the guaranteed hours consultation. 

What has the Government published? 

The Department for Business, Innovation, Science and Trade has published a series of new documents as part of its Make Work Pay: Ending One-Sided Flexibility consultation, including: 

• Analysis to support the consultation: covering note 

• Right to guaranteed hours: options assessment 

• Right to reasonable notice of shifts: options assessment 

• Right to payment for shifts cancelled, moved or curtailed at short notice: options assessment 

• Zero-hours contracts: evidence and policy implications research paper 

• Experiences of workers in insecure work: research paper 

• Experiences of workers in insecure work: data tables 

The consultation documents can be accessed here.

Alongside this, the Ministry of Housing, Communities and Local Government (MHCLG) has published additional research and datasets through its Precarious Work and Economically Inactive Survey programme. Which can be read in full here.

Together, these publications provide important new evidence to support the Government's proposals on guaranteed hours which are currently being consulted on.  

What does the Government say the evidence shows? 

The Government argues that too many workers experience insecurity through fluctuating hours, short-notice scheduling and unpredictable earnings. Its evidence highlights concerns around financial security, personal commitments and childcare, with the Government arguing that guaranteed hours, reasonable notice of shifts and compensation for cancelled shifts could improve security and wellbeing. 

Among the findings highlighted by Government are that 53% of workers in insecure work say variability in hours affects their ability to cover living costs, 58% would prefer guaranteed hours that reflect their usual working pattern, and 59% receive no compensation when shifts are cancelled. The research also found that 60% say short-notice scheduling affects their ability to manage personal commitments, while one-third of workers report losing around £250 over a four-week period because of insecure hours. Parents are particularly affected, with 75% reporting childcare impacts linked to short-notice scheduling. 

People choose flexible work 

However, the Government's own research also shows that the labour market is more nuanced. 72% of workers in ‘insecure work’ said their arrangements suited their lifestyle, while 63% of agency workers said agency work suited them and their lifestyle. 

Research on zero-hours contracts also found that zero-hours vacancies attracted around 20% more applicants than comparable fixed-hours roles, while only 15% of zero-hours workers applied for fixed-hours alternatives. 

These findings demonstrate that flexibility is valued by many workers and remains an important part of the labour market. 

Proposals will increase business costs 

One of the clearest messages from the new publications is the scale of costs Government expects businesses to face as a result of these reforms. 

According to the Government's own estimates: 

• Total employer costs could range from £350 million to £2.9 billion per year 

• Net costs could reach £300 million to £1.4 billion annually 

• Over ten years, costs could total between £3 billion and £14.1 billion 

• Direct business costs from guaranteed hours alone are estimated at between £100 million and £450 million annually 

The Government argues that some of these costs may be offset by improvements in wellbeing, retention and productivity. However, it also acknowledges that many of these benefits are difficult to quantify. 

The documents also highlight significant additional administrative costs, with workforce planning costs alone estimated at between £170 million and £420 million each year. 

For businesses already facing increased employer National Insurance contributions, National Living Wage increases and wider economic uncertainty, these additional costs cannot be ignored. 

Significant evidence gaps remain 

One of the most notable aspects of the publications is the number of areas where the Government acknowledges limitations in the available evidence. 

The documents recognise that: 

• Information on agency worker contractual hours is sparse 

• Evidence on agency worker working patterns is limited 

• There is no robust national dataset on guaranteed-hours arrangements 

• There is limited evidence on how different policy options would affect agency workers 

• Behavioural responses from workers and employers have not been fully modelled 

These gaps are important, particularly given the potential scale of the changes for the temporary labour market. 

Government evidence strengthens case for agency work exemption 

The newly published documents confirm that the Government intends agency workers to remain within the scope of the guaranteed hours reforms, while leaving open the possibility of different treatment through future regulations. The Government's analysis acknowledges the distinct nature of agency work and estimates there are around 1 million temporary agency workers in the UK. 

The evidence also recognises that the proposals could reduce demand for agency labour, create overstaffing risks, require agency-hirer contracts to be renegotiated and alter existing staffing models. Particular impacts are identified in sectors such as hospitality, retail, logistics and administrative services, where workforce flexibility plays a critical role. 

The REC will continue to press for an exemption for agency workers from the guaranteed hours provisions. The Government's own evidence highlights both the unique characteristics of agency work and the significant evidence gaps that remain around how the reforms would operate in practice, strengthening the case for a different approach for the sector. 

Should agency work remain in scope, the REC believes substantial changes will be needed to make the proposals workable. This includes a 52-week reference period that reflects seasonal and fluctuating demand, an eight-hour low-hours threshold, proportionate notice and compensation requirements, and assigning responsibility for guaranteed-hours offers to employment businesses rather than hirers. 

The REC also believes implementation should be phased and provide additional time for the agency sector, recognising the complexity of the three-way relationship between workers, agencies and hirers. 

As the consultation enters its final stages, the REC will draw on both the Government's evidence and data from across the recruitment industry to reinforce the case for a practical approach that protects labour market flexibility and avoids unintended consequences for agencies, workers and employers.