Following the introduction of new legislation on Monday, agency staff must now legally be paid the same as permanent employees, closing a loophole that had previously allowed for a disparity.

For seasonal workers holiday pay must now be calculated based on 52 weeks rather than 12 weeks, which will enable them to take more time off.

Under the reforms, companies must also provide workers with a ‘statement of rights’ on their first day, outlining details of their pay and the leave they are entitled to.

Meanwhile, the rules also quadruple maximum employment tribunal fines for employers who are demonstrated to have shown malice, spite or gross oversight from £5,000 to £20,000.

The reforms are based on the findings of a review into modern working practices led by Matthew Taylor, chief executive of the Royal Society of Arts. In his review, he suggested that zero hours contracts should be banned and that ‘gig’ workers should have access to employment and social security protections.

Business secretary Greg Clark commented: “Today’s largest upgrade in workers’ rights in over a generation is a key part of building a labour market that continues to reward people for hard work, that celebrates good employers and is boosting productivity and earning potential across the UK.”

While the Trades Union Congress (TUC) welcomes the scrapping of the agency worker loophole, it believes the reforms as a whole fail to shift the balance of power in the gig economy.

“Unless unions get the right to organise and bargain for workers in places like Uber and Amazon, too many working people will continue to be treated like disposable labour. The right to request guaranteed working hours is no right all. Zero-hours contract workers will have no more leverage than Oliver Twist,” said TUC General Secretary Frances O’Grady.