The Care Sector Bi-Annual Update – Goodbye Bank, Hello Guaranteed Hours? What does the Employment Rights Bill mean for bank and agency workers?

Deputy Prime Minister, Angela Rayner said:

“This government is delivering the biggest upgrade to rights at work for a generation, boosting pay and productivity with employment laws fit for a modern economy. We’re turning the page on an economy riven with insecurity, ravaged by dire productivity and blighted by low pay.”

The original proposal was to ban “exploitative zero hours contracts”. This, to the relief of the social care sector, has not come to fruition.

The Employment Rights Bill proposed to introduce three key changes to zero hours workers:

1. the right to guaranteed hours;
2. the right to reasonable notice of shifts and changes to shifts; and
3. the right to compensation for shifts being cancelled, moved or curtailed at short notice.

These changes will also apply to “low hours workers“. Who a low hours worker is, has not yet been defined, but their inclusion in these proposals is to ensure that employers are not able to circumvent the changes by putting in place contracts for only a few hours of work per week.

Guaranteed hours

Businesses will be required to regularly review the hours that their zero and low hours workers work over a set reference period, and then offer a contract for guaranteed hours reflecting this average. There has already been some conversation of how long this reference period should be and, pending a government response, 12 weeks has been suggested as this is a common reference period in employment law.

It could be argued that a 12 week reference period will negatively impact care providers as it is insufficient to account for seasonal fluctuations, such as students picking up additional shifts during university holidays, and calling upon bank workers during Christmas and Summer holiday periods. The risk with this shorter reference period is that the provider is then required to offer guaranteed hours based on these peaks in work, when in reality, they cannot offer guaranteed hours at this level in the long-term.

Zero and low hours workers will of course be entitled to reject an offer of guaranteed hours, and many will do as the flexibility of the bank allows them to work in other roles, study and care for family. Where such an offer is rejected, the employer will be required to make a fresh offer at the end of every subsequent reference period. This will increase the administrative burden on providers requiring them to carry out this review process and subsequent contractual offer several times a year. Failure to do so can result in Employment Tribunal claims and a financial payment to compensate the employee for their loss.

Reasonable notice and compensation

The nature of the bank is that there is no set shift pattern or days but this will change when the Bill becomes law. Employers will be required to give a specified amount of notice before a shift is due to start – how long this will be is still undecided. Similarly, once a shift has been offered and accepted, reasonable notice must be given to cancel the shift or change it. If not, workers will be entitled to be paid a ‘specified amount’ which will be no more than the earnings they would have received had they worked the shift.

This will be a key challenge for the care sector where operational requirements change quickly and at short notice due to staff sickness, emergencies, service user hospitalisation and commissioner demands.

It will mean that the way in which providers communicate with their bank staff will need to change. Sending messages on WhatsApp, for example, to the entire bank will become logistically problematic and may result in more work and risk of multiple people accepting one shift which they then need to be notified within a set timescale that it is no longer available.

Agency workers

The government proposed an extension of the above to capture agency workers, as well as zero and low hours workers. This proposal has been consulted on and the response to the consultation was published on 4 March 2025. In summary, the aforementioned rights will also be afforded to agency workers. This means that:

• providers will be responsible for making an offer of guaranteed hours to a qualifying agency worker;
• compensation for failing to offer guaranteed hours can be apportioned between the provider and agency by an Employment Tribunal;
• there will be an exception to the guaranteed hours requirement where there is a genuine temporary work need, which is beneficial to providers and will hopefully be incorporated into the zero and low hours workers provisions too;
• the responsibility to provide reasonable notice of shifts to an agency worker will rest with both the provider and the agency;
• the method by which a provider will notify an agency of available shifts, cancellations and curtailments won’t be included in the initial legislation, but the Secretary of State will have the power to make regulations dictating this; and
• the liability for paying compensation for short notice cancellation or curtailment of shifts will sit with the agency, however in reality, these costs will be built into new terms and conditions between the agency and provider.

These changes have the potential to fundamentally impact the way in which agencies operate and will add another layer of complexity and administration to providers’ staffing options.

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Benefits

These changes will benefit the care sector and its staff by providing certainty. Staff will be able to plan their work and family life in a much more structured way than they could when operating under a zero hours contract and for some, but not all bank workers, this will be attractive. They will also have financial stability and will see less fluctuation in their pay, knowing how much money they will take home each week and month. This theme of consistency and stability will transcend into care homes and service users through the continuity of care.

Action points for providers

Despite the benefits, it goes without saying that this will be a big change for providers, one of several that the Employment Rights Bill brings about, and will add to the workload and cost of running a successful business. While these changes aren’t likely to be implemented until 2026, it is sensible to begin to think about:

• reviewing and updating your bank so that it is limited to those who participate and engage with requests for shifts;
• discussing these changes with commissioners and understanding what they can do to support this move towards guaranteed hours, such as notice periods when cancelling care;
• speaking to existing bank workers to understand the appetite to accept a guaranteed hours contract;
• the methods of communication used to notify bank staff of available shifts and changes, reviewing and formalising these; and
• whether changes to rotas and shift patterns would help minimise the impact of guaranteed hours and work for the business and your service users.