Press Release: APSCo UK and OutSource urge Government to exclude agency workers from Zero Hours Contracts reforms

APSCo UK has called on the Government to exclude agency workers from proposed Zero Hours Contracts measures, warning that extending the reforms to professional contractors risks reducing labour market flexibility, harming economic growth and creating unintended consequences for employers and workers alike.

In its response to the Government's consultation, APSCo supports efforts to tackle exploitative working practices and strengthen protections for genuinely vulnerable workers. However, the trade body argues that there is insufficient evidence to justify applying the measures to agency workers, particularly those operating in the professional recruitment sector.

Agency work remains a highly regulated, compliant and established route into employment that supports workforce participation, skills development and business agility. Government sourced research cited by APSCo, alongside findings from the Association of Labour Providers (ALP) and the Freelancer & Contractor Services Association (FCSA), demonstrates that agency work provides valued flexibility for workers, including students, carers and those seeking to re-enter the labour market.

APSCo warns that the current proposals fail to adequately consider how employers and workers may respond to the reforms and could ultimately reduce employment opportunities rather than enhance them.

APSCo's key recommendations include:

• Agency workers should be excluded from the scope of the reforms, given the lack of evidence that professional contracting arrangements are contributing to the issues the Government is seeking to address.
• The Government has not fully assessed likely behavioural impacts, including reduced hiring, shorter assignments, increased automation and offshoring, and disproportionate compliance costs for SMEs, which employ the majority of the UK's workforce.
• If agency workers are included, reforms should be targeted at those most at risk of precarious work, such as lower-income workers earning less than £24,000 per year or below two-thirds of median UK earnings, as defined in the Government's report Working Lives: The Scale and Nature of Labour Market Non-Compliance.
• Agency work plays a vital role in supporting economic inactivity reduction, providing a trusted pathway into employment for NEETs and other economically inactive individuals while helping workers develop skills, confidence and experience.
• Any implementation should be piloted and phased, with a minimum 12-month lead-in period following final regulations and a further 12-month soft enforcement period to support compliance.

APSCo's response is supported by evidence from their members with one Managed Service Provider member stating that professional temporary contracting is typically long-term, structured and well remunerated. Across both public and private sector engagements, average assignment lengths are approximately 21 months, with workers commonly engaged on clearly defined projects and earning significantly above Agency Workers Regulations pay parity levels.

Tania Bowers, Global Public Policy Director of APSCo UK and OutSource says:

"APSCo fully supports the Government's ambition to tackle exploitation and improve protections for vulnerable workers. However, there is little evidence to suggest that professional agency workers are experiencing the types of insecurity these reforms are designed to address.

"Professional contracting provides organisations with access to critical skills while offering workers genuine flexibility, attractive rates of pay and clearly defined assignments. Extending these measures to agency workers risks creating significant administrative burdens without delivering meaningful benefits.

"We are urging Government to take a targeted, evidence-based approach. Agency work is a proven route into employment, supports economic growth and labour market participation, and should not be unintentionally undermined by reforms aimed at addressing entirely different challenges."

Find APSCo’s full response to the consultation here.