Navigating the Employment Rights Act

The Employment Rights Act is changing how recruitment businesses manage their own people and the workers they place. For agencies supplying temporary labour, much of the practical work involves agreeing how responsibilities will be handled with clients and other organisations in the supply chain.

In this TRN session, Kareena Prescott of C2E Law explored the implications for recruitment leaders, from harassment prevention and unfair dismissal to the forthcoming rules on guaranteed hours and cancelled shifts.

Three questions run through the changes: who is responsible, what information needs to be shared, and who pays when arrangements change? Answering them requires a close look at everyday decisions, reporting routes and client terms.

Manage implementation as an ongoing programme

Different measures are taking effect at different times. Stronger harassment duties and trade union access rights came into force on 30 October 2026. Changes to ordinary unfair dismissal and the duty to inform workers about joining a union follow on 1 January 2027. The commencement dates for guaranteed hours and short-notice shift payments remain unconfirmed. GOV.UK

Give someone responsibility for monitoring developments and coordinating the work across the business. That person needs to connect policy changes with consultant training, client communication, contracts and the information held in your systems.

Start discussions with clients while there is time to agree workable arrangements. The agency and hirer may need each other’s information to meet their responsibilities, particularly where the client controls the workplace or changes a worker’s shifts.

Make harassment prevention work at the client’s premises

Employers must now take all reasonable steps to prevent sexual harassment. The strengthened duty requires active consideration of risks and appropriate preventive action, including risks involving customers and clients. Acas

For a recruitment business, that means understanding the environment into which workers are placed. Who supervises them? Are they working alone? Which employees, customers or suppliers will they interact with? How can they report a concern?

Agree the practical arrangements with each client:

• Who takes responsibility for prevention and receives concerns?
• How quickly must an incident be reported to the agency?
• Who investigates, and how will information be shared?
• What support is available if the worker feels unable to continue in the same environment?

A client policy is useful when the agency understands how it operates and the worker knows how to use it. Build reporting information into induction, with named contacts and a clear explanation of what happens next.

Where a client cannot provide a suitable reporting contact, establish a clear route through the agency and communicate it before the placement starts. Review the arrangements periodically, particularly when managers, teams or working conditions change.

The information can be organised around the relevant department or work area. A warehouse team and an accounts team may have different supervisors and risks, even within the same client. Collecting the relevant risk assessments and procedures helps make the review meaningful without automatically repeating the entire exercise for every placement.

Contractual provisions should support the process, including cooperation and appropriate allocation of costs if agreed measures are not followed. They need to sit alongside practical prevention and complaint handling.

Keep a clear record of client decisions

The longer time limit for most tribunal claims makes reliable records particularly important. Acas early conciliation can also affect the deadline, so businesses should avoid assuming every matter follows one fixed timetable. Acas

When a client asks for an assignment to end, record the request, the reasons given and the communications that follow. A decision made in a brief telephone conversation may need to be explained months later.

Consultants should understand what belongs in the CRM and which decisions need written confirmation. The same discipline applies to concerns raised by workers: record the issue, the action taken and the follow-up.

This is particularly relevant when several organisations are involved. The agency needs a clear account of what it knew, what it passed on and how the matter was handled.

Review probation and performance management

From 1 January 2027, the qualifying period for ordinary unfair dismissal claims by employees reduces from two years to six months, and the compensatory award cap is removed. GOV.UK

Managers need to identify concerns early, discuss them clearly and document the action taken. Review whether probation and performance processes give managers enough opportunity to assess progress and address problems promptly.

The practical priority is sound performance management throughout employment. Leaving concerns unresolved until a probation review creates avoidable uncertainty for the employee and the business.

For temporary assignments, understand the individual’s employment status and the reasons behind any client request to end the work. Keep assignment decisions and their supporting evidence clear.

Prepare a process for union requests

Union access requests need a clear internal route. Nominate a responsible person and agree with clients how requests will be handled where agency workers are based at their premises.

Under the access framework, the response period is 15 working days, followed by a 25-working-day negotiation period where applicable. Prompt handling and informed advice matter. GOV.UK

Prepare onboarding arrangements for the forthcoming duty to inform workers about their right to join a union. For clients with unionised workforces, discuss how the agency and hirer will communicate if industrial action arises.

Consultants also need to understand the risks in requests concerning union members. A client request to end an assignment because of union activity should be escalated for advice.

Check holiday pay before enforcement expands

The Fair Work Agency already regulates employment agencies and businesses, with statutory holiday pay enforcement due to begin in 2027. business.gov.uk

Review how holiday pay is calculated, recorded and paid, including what happens when an engagement ends. Look for gaps between the policy, payroll records and what workers actually receive.

This is also an opportunity to review procedures against the Conduct Regulations and check that the business can produce the evidence needed during an inspection. Identifying an issue internally gives you time to understand it and put it right.

Understand working patterns ahead of guaranteed hours

The forthcoming reforms to zero and low hours arrangements involve three connected rights: offers of guaranteed hours, reasonable notice of shifts, and payments for shifts cancelled, moved or shortened at short notice. The detailed rules and commencement dates are still being developed. GOV.UK

For qualifying agency workers, the framework places the guaranteed-hours offer with the end hirer by default. Proposals about eligibility and reference periods should be treated as proposals until the regulations settle the detail. assets.publishing.service.gov.uk

Agencies can begin preparing by understanding their current workforce. Identify people on zero or low hours arrangements, examine the hours they regularly work and establish where that data is held.

The hirer may control the rota while the agency holds timesheets and assignment records. Both organisations need a clear view of the working pattern if they are to manage the eventual requirements effectively.

Seasonal work and other particular arrangements need careful attention once the final rules are available. Current planning should keep those uncertainties visible.

Agree how late changes and their costs will be handled

For temporary staffing businesses, cancelled shifts create a commercial question as well as an operational one. When a client no longer needs workers already booked, the agency needs to know who made the decision, when it was communicated and what commitments had been made.

Review the pattern of cancellations across your client base. How often does a client reduce requirements the day before a shift? Who is authorised to make that change? Does the instruction arrive through an agreed channel?

Use that information to model possible exposure while the payment rules are being finalised. Keep assumptions about notice windows and payment rates explicit.

Client terms should address how relevant costs will be handled and recovered. These discussions will be easier if they are supported by evidence about actual cancellation patterns and the way the client schedules work.

Changes to start dates also need attention. A postponed start can affect a worker’s expected income, but the precise treatment under the new provisions depends on the final rules. Keep clear records of what has been offered and any subsequent change.

Clarify responsibilities across different supply models

Permanent recruiters should consider conduct during interviews and the wider recruitment process. Client terms and reporting arrangements need to address concerns that arise before someone joins the client’s workforce.

Where an umbrella company employs the worker, agree how the umbrella, agency and hirer will share information and coordinate a response. The umbrella’s employment role and the agency’s relationship with the client both need to be reflected in the process.

Self-employed individuals and PSC contractors should also have a route to raise concerns. The arrangements should reflect the engagement, with care over employment status and any suggestion that the contractual label alone resolves the issue.

The same practical questions arise at external events. An employer receiving a complaint may need cooperation from the organiser and another business to establish what happened and respond appropriately.

Turn the changes into everyday practice

The immediate work is manageable when responsibilities are clear: update risk assessments, agree reporting routes, brief consultants, review performance processes, check holiday pay and understand patterns of working hours and cancellations.

For each area, identify the person responsible, the information needed and the client conversation required. Keep the records current and revisit arrangements when the legislation or working environment changes. That gives the business a practical basis for managing its obligations as implementation continues.

Speaker: Kareena Prescott - Founder and Principal Adviser, C2E Law. 

Host: Gordon Stoddart - CEO and Co-founder, The Recruitment Network.

For more information about C2E Law, visit their Partner page here.