Webinar Insights – Employment Rights Bill: What Employers Need to Know

What every business needs to know about guaranteed hours and shift changes

The Employment Rights Act has been called the biggest upgrade to workers’ rights in a generation, and for good reason. With sweeping changes already in force and more on the horizon, businesses across every sector are under pressure to understand what is coming, prepare their operations and make their voices heard before it is too late.

To help our clients navigate this rapidly evolving landscape, Orion Electrotech recently hosted a webinar bringing together Grant Nesbitt – Group Managing Director at Orion and two of the UK’s foremost experts: Theresa Mimnagh, recruitment and employment law specialist at Lawspeed, and Chris Bloor, Director of Compliance at Sapphire Contracting.

Over the course of more than an hour, they unpacked the changes that are already live, those that are imminent and, critically, those that are still being shaped, where your input could make all the difference.

This article focuses on the changes that matter most to businesses that rely on flexible and agency workers: guaranteed hours and shift change compensation.

Why This Bill Matters to Your Business

The Employment Rights Act became law in December 2025. At 300 pages, it is a sweeping piece of legislation, but much of it is not yet in force. The government was under a political deadline to pass it within 100 days, so a significant portion of the Act sets out principles and grants powers to make detailed regulations later. Those regulations are now being shaped through consultation, and businesses have a rare opportunity to influence the outcome.

Theresa Mimnagh described it plainly:

“The government right now is very interested in data and very interested in anything that will adversely impact upon economic growth. Businesses have an opportunity here to say: this will work for us, this won’t work for us. There is a massive opportunity right now to shape how it looks.”

— Theresa Mimnagh, Lawspeed

If businesses do not engage, they will simply have to deal with the legislation in whatever form it arrives. The time to act is now.

Guaranteed Hours – A Fundamental Shift in Flexible Working

This is the change that will have the most profound effect on businesses that use zero-hours or low-hours workers, and it applies equally to your directly employed staff and to the agency workers supplied to you.

The core principle is straightforward: after a reference period of work, a worker must be offered a guaranteed hours contract that reflects the average hours they have worked. The aim is to end what the government calls “one-sided flexibility”, where employers enjoy the benefit of on-demand labour while workers carry all the uncertainty.

How Will It Work for Directly Employed Workers?

For workers you engage directly, whether on a zero-hours or low-hours basis, the following will apply:

• After completing a reference period (the government’s preference is 12 weeks), the worker must be offered a guaranteed hours contract.
• The contract must reflect the average hours worked during that period.
• It must be on no less favourable terms than their existing arrangement.
• It will normally be a permanent contract but can be for a fixed duration if the engagement was always genuinely temporary, for example, seasonal work, maternity cover or a specific project.
• Businesses cannot simply terminate a worker at 11 weeks to avoid the obligation. Protections are built in: the entitlement survives unless termination was for conduct or capability reasons, or the engagement was genuinely temporary.

⚠️ What counts as “low hours”?

The government is consulting on this. Its preference is workers who average between 8 and 20 hours per week, designed to prevent businesses from avoiding the rules by offering a token guaranteed hour or two.

How Will It Work for Agency Workers?

This is where it gets particularly significant for hirers. For agency workers, the guaranteed hours obligation does not fall on the agency, it falls on you, the hirer.

After an agency worker has been supplied for the reference period, you will be required to offer them a direct employment contract with your business, on guaranteed hours at no less favourable terms than those on which they were supplied.

This will cover PAYE and umbrella-supplied temps. Limited company contractors are expected to be out of scope.

The recruitment industry has pushed back strongly on the 12-week reference period for agency workers, arguing it does not reflect the reality of why agencies are used, short-term projects, budget constraints, covering absences and managing fluctuating demand. The industry is calling for a minimum 12-month reference period. The current consultation acknowledges this pressure and explicitly asks whether the reference period should be 12, 26 or 52 weeks.

What this means in practice

If you are currently six months into a project using an agency worker and the reference period is set at 12 weeks, you may be required to offer that person a direct contract three months into the engagement, regardless of whether your need for them will continue beyond the project.

What’s Coming for Shift Notice & Cancellation Compensation

Alongside guaranteed hours, two further rights are being introduced that will directly affect how shifts are communicated and managed.

Reasonable Notice of Shifts

Workers, both directly employed and agency, will have a right to receive reasonable notice of their shifts. The consultation suggests that seven days will be the threshold: notice of more than seven days is deemed reasonable; notice of fewer than seven days will require both parties to establish its reasonableness.

There are sensible carve-outs being discussed. If a worker calls in sick on a Monday morning and a replacement is needed within hours, that is clearly not an unreasonable scenario, the consultation acknowledges this. For agency workers in particular, there is recognition that much of the value of using flexible labour is the ability to respond quickly to demand. A shorter notice threshold is being considered for the agency sector.

Enforcement could sit with the employment tribunal, the new Fair Work Agency, or both, this is still being determined.

Compensation for Cancelled, Curtailed or Moved Shifts

Perhaps the most operationally impactful change: if a shift is cancelled, cut short or moved at short notice, the worker will be entitled to compensation.

For many businesses, this will change little, if you book someone for a shift, you pay them for the shift. But for businesses that over-book and send people home, or that manage variable demand by releasing workers early, this represents a genuine shift in risk.

Key point on liability

For agency workers, the compensation claim is made against the agency, but the legislation includes provision for the agency to recover that amount from the hirer. So if your business cancels or curtails a shift, the cost will ultimately flow back to you.

There are still significant questions to be resolved: What is the minimum compensation amount? Does this apply only to workers without guaranteed hours? If someone accepts a moved shift and still works it and gets paid, is there compensation? These are exactly the kinds of questions the consultation is asking, and your answers matter.

Key Takeaways at a Glance

What Should You Do Right Now?

1. Audit your flexible workforce

Understand how many of your workers, directly employed and agency, are on zero or low-hours arrangements, how long they have been engaged and what their average hours look like.

2. Review your shift management processes

Consider how shifts are currently communicated and cancelled. Where short-notice arrangements are the norm, think about whether process improvements could reduce exposure to compensation claims.

3. Respond to the consultation

The government’s consultation closes on 25 August 2025. Responses can be submitted via the gov.uk website or by electronic form.

4. Talk to Orion

Your Orion contact is here to help. We are working closely with our legal partners at Lawspeed and will be collating client concerns to ensure business voices are heard through the right channels, including the Association of Recruitment Consultancies.

Have concerns about how these changes could affect your business?

We want to hear from you. Reach out to your Orion contact today and tell us how guaranteed hours and shift changes would impact your operations.

Contact your Orion Electrotech Account Manager to arrange a consultation

Consultation response deadline: 25 August 2025 

To view the full webinar, please email marketing@orion-group.com to request the link.

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This article is based on the Orion Electrotech Employment Rights Bill webinar held on 3 June 2026, featuring Theresa Mimnagh (Lawspeed) and Chris Bloor (Sapphire Contracting). It is intended as an informative summary and does not constitute legal advice. For specific guidance on how these changes apply to your business, please seek independent legal advice.