The Protection of Employees (Temporary Agency Work) Act
The Act, which transposes the EU Directive on Temporary Agency Work 2008/104/EC, was signed into law by the President on Wednesday last, 16 May 2012.
The purpose of this update is to highlight some of the main provisions of the Act which entitles agency workers to:
- Receive the same basic working and employment conditions as those which the agency worker would have received if employed directly by the hirer to do the same or similar work.
- To access collective facilities of the hirer (to include canteen, child care and transport services), on the same basis as employees of the hirer.
- To be informed about employment opportunities with the hirer on the same basis as those who are employed by the hirer, for the purpose of enabling the agency worker to apply for vacant positions with the hirer.
Agency workers are defined in the Act as individuals employed by an employment agency under a contract of employment, under which the agency worker may be assigned to work for, and under the direction or supervision of, a person other than the employment agency. As such, employees of contractor companies and limited liability companies placed by an employment agency together with employees of managed service contracts (such as catering and contract cleaning), are excluded from the provisions of the Act.
A hirer is defined as an entity engaged in economic activity for whom, and under the direction and supervision of, an agency worker carries out work pursuant to an agreement (whether in writing or not), between an employment agency, the employer of the agency worker, and that entity.
Unlike the position in some other European countries where agency workers have to wait for a period of time to accrue rights, in Ireland agency workers are entitled to the benefit of such rights on a day one basis. The rights of agency workers to equivalent pay (see below) as employees of the hirer is retrospective to 5 December 2011, with all other rights accruing from the date of the Act.
Pay is defined in the Act as comprising basic pay, shift premium, piece work, overtime, pay for unsocial hours worked and Sunday pay. Basic working conditions are defined as pay (as defined above) and conditions associated with working time, rest breaks, night work, annual leave and public holidays.
The definition of pay provided for in the Act expressly excludes payments such as sick pay, payments under any pension scheme or financial participation scheme (such as a share option scheme). While not expressly excluded from the definition of pay but because of the prescriptive way in which pay is defined in the Act, it impliedly excludes components of pay such as bonus, maternity top up, health insurance etc.
Who will be impacted by this Act?
In the first instance, agency workers will be entitled to the same basic working and employment conditions as if they had been employed by the hirer under a contract of employment.
While the Bill contained a reference to a ‘comparable employee’ for the purpose of allowing the agency worker to identify a person against whom the agency worker could claim parity, the Act does not contain such a reference but rather provides that the hirer must demonstrate that the agency worker is in receipt of no less favourable terms and conditions than an employee who might have been recruited directly from the labour market by the hirer to carry out the same or similar work which forms the basis of the agency workers assignment.
This amendment from the provision contained in the Bill is helpful in limiting the cost of an agency worker to a hirer, as instead of the agency worker having the ability to nominate a comparator who might have been hired at a very different time and in different circumstances such as a more expensive labour market, the agency worker is confined to asserting rights to the basic working and employment conditions as if he/she had been recruited directly as an employee of the hirer to do the same or similar work.
The elements of the Act that relate to pay are retrospective to 5 December 2011. However, those provisions that relate to information about vacancies and access to collective facilities of the hirer are not retrospective.
It is advisable that hirers and agencies, if they have not already done so, work closely together to ensure that they share information on pay and conditions to ensure that they are in compliance with their obligations under the Act. Further, in their commercial arrangements with each other, hirers and agencies should take all appropriate steps to ensure that they are protected in the event that an agency worker initiates proceedings against either of them.