Delay in implementing assured hours and initial employment benefits for temporary workers in the UK, pushed back to 2027.
The UK Government has announced a delay in the implementation of the Employment Rights Bill, with parts coming into effect in 2025, 2026, and 2027. This phased rollout aims to provide employers and workers ample time to adjust to the substantial reforms.
One of the key measures affected by this delay is the guaranteed hours rights for zero-hours workers and the right to protection from unfair dismissal from day one of employment. These provisions, along with the application of guaranteed hours rights to agency workers, are now expected to take effect in 2027 following further consultation and the finalization of secondary legislation.
The Fair Work Agency, which will investigate and enforce employment rights, is scheduled to be established in April 2026. This agency is expected to play a crucial role in enforcing the new rights once they come into force.
The delay in implementing the Employment Rights Bill provides relief from dealing with the recent increase in HMRC tax enforcement action against certain umbrella companies and their users. The umbrella tax legislation, distinct from the umbrella company regulation, has also been deferred until 2027. This delay gives the supply chain more time to prepare for the expected major impact of the umbrella tax legislation due in April 2026.
For employers, the phased approach allows more time to update contracts, policies, and training to comply with new obligations. However, once implemented, there will be new legal risks and administrative demands, including the responsibility of the end hirer to offer guaranteed hours to agency workers. Employers must also be wary of potential tribunal claims, particularly claims that seek to prevent manipulation of work patterns to avoid guaranteed hours obligations.
The extension of guaranteed hours rights to agency workers represents a significant improvement in employment security. It means they will be entitled to an offer of guaranteed hours from the end hirer, providing more predictable work and income. This reform aims to reduce exploitation tied to insecure, zero-hours arrangements and enhance day-one rights for unfair dismissal claims, which will benefit agency workers by removing the previous two-year qualifying period.
Stakeholders such as the CIPD and TUC view the roadmap positively, emphasizing that the gradual rollout will create lasting positive changes in employment rights while helping small businesses adapt and avoiding abrupt disruptions. The reforms are intended to boost living standards through stronger worker protections and reduce insecure work practices.
Consultation on specific details such as the length of reference periods, exceptions, qualifying conditions, and definitions relating to these rights is expected in autumn 2025, with detailed government guidance to follow. The government will seek feedback on how the proposed changes will affect stakeholders' existing systems and processes and the steps they will need to take as a result.
In summary, the deferred implementation means that while workers, including agency workers, will ultimately gain stronger guaranteed hours and day-one rights, employers have an extended period to prepare. The government has designed this phased timeline to balance improved worker protections with practical business adaptation, aiming for full enactment of these rights in 2027.
Business owners can use the extra time afforded by the delay in implementing the Employment Rights Bill to update contracts, policies, and training to comply with new obligations, such as the responsibility of providing guaranteed hours to agency workers. The fair work agency, expected to be established in 2026, will play a crucial role in enforcing these new rights when they come into effect in 2027, along with the umbrella tax legislation also slated for 2026.
