The 2010 Agency Worker Regulations require that once an agency worker has been in post for 12 weeks, he should receive the same pay as would a permanent employee of the hirer in the same role. This is the principle of equal treatment.
Regulation 14(3) makes the agency liable for any breach of equal treatment with respect to basic working and employment conditions (e.g. pay) unless it has, in summary:
- taken reasonable steps to obtain relevant information from the hirer;
- once that information was received, determined what those basic working and employment conditions are; and then
- ensured that the worker receives his AWR equal treatment rights.
The AWR also states that the agency and the hirer shall be liable for any breach “to the extent that each is responsible”, so accepting that the blame may at least to some extent lie with the hirer.
Stevens v Northolt High School is the only reported case we have seen on this point. The School agreed to pay agency Teach 24 for Miss Stevens’ services as a music teacher. She successfully passed the 12 week qualifying period and so became entitled to equal treatment. Teach 24 contacted the School on at least 5 occasions outlining in no doubt increasingly insistent tones that:
- the School should provide Teach 24 with details of the salary/allowances that would have been paid to Miss Stevens if she had been directly employed by it;
- Miss Stevens’ pay had to be adjusted to remain compliant with the AWR; and
- It was both Teach 24’s and the School’s responsibility to ensure Miss Stevens was paid appropriately and there would be legal implications and penalties for failing to do so.
On the facts, the Tribunal concluded that Miss Stevens should have received an additional £94 a week over 111 weeks; she therefore suffered a total loss of £10,878 gross. Who should be responsible for this?
Had Teach 24 taken reasonable steps to obtain the relevant information from the School as required under Regulation 14(3)(a)? Or should Teach 24 have done more to determine the appropriate pay rate, e.g. by searching its databases/the internet for the School’s old permanent vacancy adverts and taking a view on that basis? The Tribunal concluded that Teach 24’s actions to chase the School were reasonable and so it had satisfied Regulation 14(3)(a). It was unnecessary to consider limbs (b) and (c) because the School had not provided the requested information. The School was therefore found liable for the whole sum.
In this case, the Tribunal did not criticise Teach 24 for its failure to pay Miss Stevens any increase because her entitlement could not be quantified due to the lack of information provided by the School. What is not clear, however, is who would have been liable (or how liability would have been shared) if the hirer had provided the information, but the agency had no contractual right to increase its fee, and the hirer would not agree to it?
One could argue that the agency would be responsible for the breach by failing to include a clause allowing for an increased fee. Alternatively, you could argue that the hirer who is aware of the worker’s rights under the AWR but refuses to agree to the increased fee anyway is responsible. Sorry, agencies, but in my view liability would wholly lie with the agency as the agency’s duty under limb (c) to ensure the worker receives equal treatment should extend to ensuring that its contract with the hirer provides for an increase in the fee in light of the AWR and/or to meeting the extra out of its margin.
Lessons from this case:
- agencies should persevere with repeated written information requests of a hirer both during and after the first 12 weeks of an assignment; making one or two requests is unlikely to satisfy the “reasonable steps” test so as to shift the liability on to the hirer. It makes sense to start those requests as soon as it becomes clear that the worker will get past the 12 week point. It must make sense also for the agency to retain the evidence of the requests – read-receipts on emails, signed-for deliveries of hard copy letters, etc.;
- agencies should ensure they have the contractual right to increase their fee where required in order to satisfy the AWR;
- hirers should treat agencies’ requests for information seriously and respond promptly (and ensure their staff are aware of the risks of not doing so); but
- there is no suggestion from the Stevens case that agencies are required to conduct their own external or independent research as to what comparable packages at the hirer might look like, or to rely on a guess (even an informed one) as to what the hirer pays.