What is the Employment Rights Act 2025?
The Employment Rights Act 2025 is the biggest overhaul of UK employment law in a generation, changing the rules across 28 areas including zero-hours contracts, unfair dismissal, sick pay and parental leave. It received Royal Assent on 18 December 2025, and the Government is implementing it in stages through 2026 and 2027 under a published roadmap.
For temporary recruitment agencies, one package matters far more than the rest: the zero-hours and low-hours measures. They were written to end what the Government calls "one-sided flexibility" — and Parliament deliberately extended them to agency workers, precisely so that clients can't switch to agency staffing to avoid them.
When do the new rules apply to agency workers?
Royal Assent — the Employment Rights Act 2025 becomes law.
Government consultation on the zero-hours regulations: thresholds, reference periods, regularity tests, exceptions, information sharing and detailed agency/client arrangements.
Government considers responses and develops final policy positions, regulations and guidance. Publication timing not yet confirmed.
Guaranteed hours, shift notice and cancellation pay take effect — including for agency workers.
The precise 2027 month has not been fixed. Related changes agencies should have on their radar: the ordinary unfair dismissal qualifying period falls to six months for dismissals from 1 January 2027; the standard time limit for many Employment Tribunal claims rises from three to six months, with commencement no earlier than October 2026; and umbrella companies and payment intermediaries are brought within the Employment Agencies Act 1973 regulatory framework, planned for 2027.
The three new rights, and what they demand of an agency
| New right | What the Act says | What your agency will need |
|---|---|---|
| Guaranteed hours offer | Qualifying zero- and low-hours workers must be proactively offered a contract guaranteeing hours that reflect what they actually worked over a reference period (the government's consultation indicates an overall preference for 12 weeks; for agency workers it seeks views on 12, 26 or 52 weeks, or another period). For agency workers, the client normally carries the duty to make the offer, based on the regular hours the worker did under that client's direction and supervision — and a worker who accepts becomes directly engaged by that client. | Hours tracked per worker per client, per week; automatic flagging as workers approach qualification, so the agency can notify the client, plan supply and review any relevant contractual or commercial implications; a record of every offer, acceptance and refusal. |
| Reasonable notice of shifts | Workers gain a right to reasonable notice of shifts — the day, time and hours — and of changes to shifts already offered. Both the agency and the client are responsible for giving agency workers that notice, subject to any exemptions specified in regulations, and a tribunal may apportion liability according to each party's responsibility. What counts as "reasonable" will be set in regulations. | Warnings at the point of booking when a shift is created or changed inside the notice window; dual-party evidence — a timestamped log of when the client told the agency and when the agency told the worker. |
| Cancellation & curtailment pay | Workers must be proportionately compensated when a shift is cancelled, moved or cut short (curtailed) at short notice. The agency pays the worker, and is entitled to recover that payment from the client to the extent the client was responsible for the short notice. The client's liability is to the agency, not a second payment to the worker. Amounts and notice thresholds remain subject to the final regulations. | Detection of short-notice cancellations and curtailments; calculation of the payment due; the worker payment through payroll and any client recharge through invoicing, tracked as two linked transactions; an audit record of the reason and the responsible party. |
Who is responsible — the agency or the client?
More is settled here than most commentary suggests. The Act establishes the main starting allocation of responsibilities: the client normally carries the duty to make a guaranteed hours offer to a qualifying agency worker (regulations may move that duty to the agency or another intermediary in specified cases) — and a worker who accepts becomes engaged directly by the client. Both the agency and the client are responsible for reasonable notice of shifts (subject to any client exemptions set in regulations), with tribunals able to apportion liability according to each party's responsibility. And the agency carries the statutory responsibility for ensuring qualifying short-notice cancellation, movement and curtailment payments are made to the worker (though in some supply chains the payment mechanics may run through an umbrella or payroll intermediary), and is entitled to recover that payment from the client to the extent the client was responsible for the short notice — the client's liability runs to the agency, not to the worker.
What remains open — and is being decided in the consultation closing 25 August 2026 — is the detail: the initial reference period (the Government's consultation indicates an overall preference for a 12-week initial reference period; for agency workers it seeks views on 12, 26 or 52 weeks, or another period), the low-hours threshold (options from 8 to 48 guaranteed hours per week in four-hour increments, plus an “other” option, with the Government currently favouring a threshold within the 8–20 range), the calculation method, payment amounts and notice thresholds, exceptions, and what information agencies must share with clients so clients can comply.
Note the commercial sting in the settled part: a worker who accepts a guaranteed hours offer becomes directly engaged by the client. For agencies, tracking who is approaching qualification is not just compliance administration — it provides early warning of a possible move into direct engagement, and time to review the workforce, client and contractual implications with your advisers.
Whichever way the regulations land, one thing is already certain: a significant part of the evidence burden will sit in the agency's CRM — hours worked, offers made, notice given, cancellations logged, communications retained — while compliance will also depend on timely, accurate information flowing from clients. Agencies that can produce that evidence automatically will carry the new regime lightly; agencies running it on spreadsheets will not.
What PrimePRO is building — compliance inside the CRM
PrimePRO is a recruitment CRM built exclusively for UK temporary agencies, with integrated payroll through PrimePAY. We are developing a configurable compliance rules engine intended to support agencies with the new operational and record-keeping requirements. Because the regulations and guidance are not final, reference periods, eligibility rules, notice thresholds and payment calculations remain configurable rather than hard-coded — so the system can be adjusted as the rules settle. Final functionality and release timing will depend on the regulations, official guidance and product testing.
Guaranteed hours monitor
Tracks each worker's hours separately for each relevant client across the configured reference period, and flags who is approaching qualification — with the offer record kept against the worker.
Cancellation pay & recovery ledger
Records who changed or cancelled a shift, when, and how much notice the worker received — then calculates the payment due, pays the worker through payroll and tracks any recharge to the client — to the extent they were responsible for the short notice — as a linked transaction.
Reasonable notice warnings
Consultants see a warning at the point of creating or amending a booking inside the notice window. The system records that the warning was shown and how the booking was then handled, contributing to your audit evidence.
Compliance dashboard
One screen showing which worker–client relationships are approaching qualification across your whole desk, so nothing depends on a consultant remembering to check.
Controlled assignment audit history
A comprehensive, timestamped timeline of offers, acceptances, cancellations and amendments per worker — including when the client told the agency and when the agency told the worker, because notice liability can be apportioned between you.
Communication log & reporting
Supported worker and client communications retained with timestamps — subject to the channel, configuration and applicable data-protection requirements — with reporting to evidence notice and scheduling activity.
The compliance module is in development now, with a beta programme for partner agencies ahead of 2027 commencement. Beta agencies help shape the workflows and get first access.
What your agency should do now — before the regulations land
- Get your hours data clean. Qualification and the resulting offer will depend on reliable records of contractually guaranteed hours, actual hours worked and working patterns during the relevant reference period — tracked per client. If your timesheet data is patchy, fix that first.
- Timestamp everything — on both sides. Start recording when the client notified you of shifts and changes, and separately when you notified the worker. Liability for poor notice can be apportioned between agency and client, so both timestamps matter.
- Review your cancellation habits. Understand how often shifts are cancelled or curtailed at short notice today — that's your future compensation exposure.
- Respond to the consultation before it closes on 25 August 2026. Hours thresholds, reference periods, regularity rules, exceptions, information-sharing duties and the detailed operation of agency/client responsibilities are all being decided. It matters that agencies provide practical evidence on how the proposals would work in a real temp desk.
- Ask your software provider the hard question: how, specifically, will guaranteed hours monitoring, cancellation compensation and audit trails work in their product — and when?