The Employment Rights Act 2025 received Royal Assent on 18 December 2025 (i.e. became law, with phased implementation to follow). The Act will provide eligible workers and agency workers with a right to reasonable notice of shifts and a right to payment for shifts cancelled, curtailed, or moved at short notice.
Further details on these measures can be found here.
These rights are not in force yet. The government will consult before developing final policy positions to implement the zero hours measures, which will be set out in regulations. We will share details of this consultation as soon as possible and look forward to your feedback.
Short notice payments
The Act will require agencies to make payments to eligible agency workers if their shifts are cancelled, rescheduled or curtailed at short notice. Short notice payments will not be required where the cancellation, movement or curtailment is initiated by the agency worker. The amount of the payment and what constitutes “short notice” will be set in regulations, together with certain eligibility criteria.
The government considers that the recovery of short-notice payments from hirers, where they are responsible for the cancellation, curtailment, or movement of shifts at short notice, is a matter for business to business relationships and contractual arrangements between agencies and hirers. However, existing arrangements between agencies and hirers may not include any mechanism for the agency to recover short notice payments from hirers, and agencies might not have agreed such arrangements had they known that they would be required to make those payments. The Act therefore provides that where agencies have entered into agreements with hirers before 18 February 2026 (and these agreements have not been modified since), agencies will be able to recoup the costs of short notice payments from the hirer to the extent the hirer is responsible for the short notice.
What does this mean?
If an agency enters into an arrangement with a hirer before 18 February 2026, and this arrangement is not modified after, the agency will be entitled to recover short notice payments from a hirer to the extent that the hirer is responsible for the short notice, regardless of what is agreed in the agency’s arrangement with that hirer.
If an agency enters into an arrangement with a hirer or modifies this on or after 18 February 2026, the agency would need to seek to include its own contractual provisions for recouping short notice payments, if it wished. Of course agencies may wish to seek their own legal advice on this matter.
Our Director of Compliance, Chris Bloor’s commentary:
“Essentially, this is a temporary protection designed to avoid agencies getting stuck with costs they never agreed to take on.
If an agency– end client contract was signed before 18 February 2026 and has not been modified since, then:
- The agency automatically gets a statutory right to recover the short‑notice payment from the hirer,
- To the extent the hirer was responsible,
- Regardless of whether the contract itself contains a clause allowing recoupment.
If the contract is signed or modified on or after 18 February 2026:
- The statutory protection does NOT apply.
- The agency will only be able to recoup the cost if it has contractually negotiated the right to do so.
- Agencies simply bear the cost unless their terms explicitly provide otherwise
I suspect that this could result in end clients wishing to renegotiate terms after the above date with a view to trying to pass down these costs. In this circumstance, they are likely to land at our door at some point.”
