Make Work Pay: Modernising the Agency Work Regulatory Framework
The TUC is the voice of Britain at work. We represent more than 5.5 million working people in 47 unions across the economy. We campaign for more and better jobs and a better working life for everyone, and we support trade unions to grow and thrive.
Our affiliated unions represent agency workers across a range of sectors, both in the private and public sector. Agency work is one of the prevalent forms of insecure work and agency workers are a significant part of the labour market. We estimate that there were at least 789,000 people in the UK working through an employment agency during the final quarter of 2025. 1 Other estimates place this figure higher, with the Recruitment and Employment Confederation estimating that there are one million workers on agency assignments every day. 2
Agency work is characterised by job and income insecurity, a reduced entitlement to employment rights and inadequate enforcement of the reduced range of employment rights to which agency workers are entitled.
Agency worker legislation should be amended and strengthened to make sure that:
- the longstanding existing issues that agency workers face (unfair deductions from pay, indecipherable pay slips, lack of comprehensible information about their assignments etc.) are tackled; and
- agency work becomes a genuine stepping stone to permanent, secure employment, which would benefit workers and drive economic growth.
This government consultation provides a welcome opportunity to address the systemic issues that workers in the agency sector face, chiefly inadequate labour market protections and a lack of effective enforcement.
Numerous proposals in the consultation will bring real benefits for agency workers:
- The proposed amendment to Regulation 12 of the Conduct Regulations to widen the scope of protection to agency workers who are engaged via an umbrella company is welcome. This will result in agency umbrella workers having the important right not to have their pay withheld in the circumstances an umbrella company hasn’t received payment from an employment business.
- The recognition that transparency around key terms and conditions needs to improve. Welcome proposals include making it easier for agency workers to understand who their employer is and the requirement to agree gross pay rates at the outset, which would avoid the current situation of confusing unfair deductions taking pay below the initial agreed rate. Unions report that one of the most common problems for agency workers is when they receive wages below the rate that they’ve agreed with the agency, because of deductions made by umbrella companies. The TUC has previously called for greater clarity on assignment rates and has recommended that when agency workers are informed of assignment hourly rates, these are the rates they must receive in their wage packet. It’s welcome that this issue has been recognised.
- It’s welcome that the government intends to restrict the use of kickbacks in the umbrella sector, which can result in a detrimental impact on workers’ take-home pay.
- We support the proposal set out in paragraphs 89 and 90 to strengthen Regulation 5. We agree that Regulation 5 should be amended so that employment businesses cannot make work-finding services conditional upon workers working through an umbrella company.
- We support the government proposal to amend Regulation 32 to ensure that umbrella companies cannot opt out of the Conduct Regulations on behalf of workers. We know that some umbrella company contracts currently opt-out agency workers from the Conduct Regs, by default, and the implications are not always fully explained to the worker.
But it’s important that the impact of the positive reforms included in this consultation are not undermined by the proposals to water down existing protections; proposals that appear to be driven solely by an arbitrary target to cut 25 per cent of regulation.
We are concerned that parts of the consultation are drafted in the context of reducing the regulatory burden on recruitment agencies, rather than seeking to put in place the most effective regulatory system. The proposals relating to watering down the provision of information to both workers and hirers are particularly concerning. The TUC believes the proposals framed as cutting the regulatory burden on agencies and hirers, will be counterproductive as they will result in agency workers receiving less information than they do now. This will create more confusion for workers who may be already involved in a complex employment relationship with three other parties (umbrella, agency and hirer).
After a government review 3 found clear evidence that existing transparency obligations are not being followed, it is important that the focus is on enforcing and strengthening existing rights rather than admitting defeat and streamlining existing regulations because agencies are failing to comply with their basic obligations.
- 1 TUC analysis of LFS data defines temporary agency workers as employees in their main job who reported that this job was not permanent in some way and that they were working for an employment agency; permanent agency workers as employees in their main job who reported that this job was permanent and that they were an agency worker; agency workers as temporary or permanent agency workers thus defined.
- 2 Recruitment and Employment Confederation website, www.rec.uk.com/our-view/policy-and-campaigns/voice-of-the-worker
- 3 Post Implementation Review of Regulation 13A- Key Information Documents
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