Employment Rights Act 2025: What West Midlands Employers Using Agency Staff Must Do Before 2027

The Employment Rights Act 2025 brings new rules for UK employers who use agency workers. It became law on 18 December 2025 and also changes how you plan shifts and budget for staffing. Some measures have applied since April 2026, but the biggest changes for agency workers still have no start date. These include guaranteed-hours offers, reasonable notice of shifts and pay for shifts cancelled at short notice.

For employers across Birmingham, Walsall and the wider West Midlands, that gap is useful. It gives you time to check how you use temporary staff before the detailed rules arrive.

As a recruitment agency in Birmingham, Starting Point Recruitment supplies temporary and permanent staff across the region. Here is what has changed, what is still to come and what you can do now.

Key takeaways

• No date yet: guaranteed hours, shift notice and short-notice cancellation pay will cover qualifying agency workers, but only once regulations are made.
• Who does what: hirers will usually make guaranteed-hours offers. Agencies will make cancellation payments and may recover them from hirers.
• What to do now: record agency hours and shift changes, and check how your agency terms handle the new costs.

What Does the Employment Rights Act 2025 Mean for Agency Workers?

The Act extends its new zero-hours protections to agency workers, so agency work cannot be used to sidestep them. Agency work involves three parties: the worker, the agency and the hirer. The Act splits the new duties between them rather than placing them all on one business.

Temporary recruitment is not going away. What changes is that regular, predictable use of agency workers may in future bring extra duties, particularly for hirers. If you are newer to using temps, Starting Point Recruitment’s guide to how temporary recruitment works in the UK covers the basics.

The Agency Workers Regulations 2010 still apply. From day one, agency workers can access shared facilities and receive information about relevant vacancies. After completing 12 weeks in the same role with the same hirer, they gain the right to equal treatment on basic pay and working conditions. The government’s page on agency workers’ rights has the details.

What Are the Key Employment Rights Act Dates for Employers?

Source: the government’s Employment Rights Act timeline, updated 22 October 2026.

Which Employment Rights Act Changes Are Already in Force?

Several changes already apply. It helps to keep these separate from the reforms still waiting for regulations.

Statutory Sick Pay and Day-One Family Leave

Since 6 April 2026, SSP has been payable from the first day of sickness absence rather than the fourth. The Lower Earnings Limit has also gone, so lower earners now receive 80% of their average weekly earnings or the standard SSP rate, whichever is lower.

Paternity leave and unpaid parental leave became day-one rights on the same date, subject to the usual notice rules.

The agency or umbrella company that manages an agency worker’s payroll usually pays their Statutory Sick Pay (SSP). Higher sick pay costs can still feed into charge rates, so ask your agency how it has handled the change.

The Fair Work Agency and Longer Tribunal Time Limits

The Fair Work Agency launched on 7 April 2026. It brings enforcement of several workplace rights under one body, including the National Minimum Wage and the rules that govern employment agencies.

Since 1 October 2026, most employment tribunal claims can be brought within six months rather than three, for matters arising on or after that date. Records of shifts, pay and complaints therefore need to be kept and be easy to find, for longer.

A Stronger Duty to Prevent Sexual Harassment

From 30 October 2026, employers must take all reasonable steps to prevent sexual harassment of their employees. They must also not permit harassment by third parties such as customers or contractors. If temporary staff work alongside your own team, agree with your agency whose policies, training and reporting routes apply on site.

What Agency Worker Rights Are Still to Come?

Three rights in the Act will apply to qualifying agency workers once regulations are made:

• guaranteed-hours offers

• reasonable notice of shifts

• payment when shifts are cancelled, moved or cut short at short notice

The government consulted on the detail in Ending one-sided flexibility, which closed on 25 August 2026. Its response has not yet been published. The official timeline says start dates will be set after the consultation, although the government’s 2025 roadmap pointed to 2027.

Will Agency Workers Get Guaranteed Hours?

Yes, if they qualify. Under the Act, the hirer will have the duty to offer guaranteed hours to a qualifying agency worker. The offer must reflect the hours the worker has regularly worked for that hirer during a reference period.

If the worker accepts, the hirer employs them directly under a new contract rather than continuing the arrangement through the agency. They can also turn the offer down and stay on their current arrangement.

The qualifying rules will be set in regulations. The consultation put forward these proposals, which are not final:

• Reference period: the government prefers 12 weeks for directly engaged workers. For agency workers, it asked whether 12, 26 or 52 weeks is right.
• Hours threshold: workers already guaranteed more than a set number of hours would fall outside the right. The government’s preferred range is 8 to 20 hours a week.
• Regular pattern: the hours worked would need to meet regularity requirements during the reference period.
• Agency duty: regulations could move the duty from the hirer to the agency in specific situations.

Take a manufacturing business in Walsall that has used the same three agency workers on fixed weekday shifts for six months. That is the kind of arrangement the right is aimed at. A temp covering a two-week peak, by contrast, would not complete even the shortest reference period proposed.

What Will Change for Shift Notice and Cancellations?

Qualifying agency workers will be entitled to reasonable notice of shifts and of changes to them. Regulations will set a period of notice that is presumed reasonable. The consultation asked what that period should be for agency workers, with options from under five days up to four weeks.

If a shift is cancelled, moved or cut short at short notice, the worker will be due a payment. Under the Act, “short notice” cannot be set at more than seven days. The payment cannot exceed what the worker would have earned, and the consultation tested levels from 10% to 80% of those earnings. No payment is due when the worker cancels or does not turn up.

The consultation cites survey evidence that 64% of agency workers get less than 24 hours’ notice of cancellations or changes to their shifts. For hospitality, manufacturing and logistics employers, that shows where booking and cancellation habits may need to change.

Who Is Responsible: the Hirer or the Recruitment Agency?

The Act gives each right to a different party:

 Cost recovery is the point to check in your contracts. The Act gives agencies an automatic right to recover these payments only under agreements made before mid-February 2026 and not changed since. Even then, recovery is limited to the extent the hirer caused the short notice. For newer or amended agreements, it depends on the terms you agree with your agency.

What Other Employment Law Changes Should Employers Prepare For?

Unfair Dismissal Protection After Six Months From January 2027

For dismissals on or after 1 January 2027, the qualifying period for ordinary unfair dismissal protection falls from two years to six months. The cap on compensatory awards is also removed.

Most agency workers are not employees of the hirer, so this mainly affects your own staff. It does matter for temp-to-perm hires. Time on an agency assignment does not usually count, so the six months normally runs from the day you employ someone directly. Review probation periods, performance management and dismissal procedures to ensure managers raise and document concerns early.

Umbrella Companies and PAYE

Umbrella companies employ and pay many temporary workers supplied through agencies. Since 6 April 2026, HMRC rules have made the agency that contracts with the end client liable for PAYE if an umbrella company fails to pay. Where no agency is involved, the end client can be liable instead. These rules sit outside the Act.

The Act itself brings umbrella companies into the regulation that already covers employment agencies, from December 2027 under the current timetable. Find out who employs and pays each temporary worker you use, and whether an umbrella company sits in the chain.

How Can West Midlands Employers Prepare for the Employment Rights Act?

Preparation is about finding where current practice may need to change, not replacing arrangements that already work.

Audit Agency Assignments and Working Hours

Build a simple record of every agency assignment across your sites:

• start date and expected end date
• average weekly hours, recorded in 12-week blocks to compare with any reference period
• whether the worker does the same shifts each week
• the reason for using temporary cover
• the agency and, where relevant, the umbrella company that pays the worker

This helps employers identify genuinely temporary roles and permanent positions they effectively fill through an agency.

Tighten Shift Scheduling and Records

• Record when each shift is offered, confirmed, changed or cancelled, and who made the change.
• Agree with your agency who tells the worker about changes, and how quickly.
•  Keep these records long enough to cover the six-month tribunal time limit.

Review Your Recruitment Agency Agreements

Check how your terms of business deal with:

• notice of shifts and who communicates changes
• short-notice cancellation payments and how costs are recovered
•  sharing the hours data needed to work out guaranteed-hours offers
• updating the agreement once the regulations are published

Reassess Temporary and Permanent Staffing Plans

Different roles suit different types of recruitment:

• Temporary recruitment suits sickness cover, short projects and seasonal peaks such as Christmas.
• Permanent recruitment may suit roles with steady, predictable hours, especially where agency workers already cover them week after week.
•  Interim recruitment can bring in an experienced professional for a defined project or a gap in management.

What Should Employers Do Next?

You do not need to wait for the regulations to be prepared. Start with an accurate record of how you use agency workers now and a check of your agency agreements. Then watch for the government’s consultation response, which will set the qualifying rules and payment levels.

This article is general guidance, not legal advice. For decisions about specific contracts or dismissals, take advice from a qualified employment lawyer.

If you use agency workers in Birmingham, Walsall or the wider West Midlands, contact the Starting Point Recruitment team to check how these changes affect your staffing plans and talk through temporary, permanent and interim options.