A new EC directive giving temporary agency workers better pay and work benefits is due to come into effect before the end of 2011. The government has started consultation to gain people's views. Law expert Fiona Rushforth explains what's involved for employers.

The hospitality industry is one of the principal sectors making use of the UK's estimated 1.3 million temporary agency workers. The seasonal nature of hospitality work means that restaurants, hotels and pubs benefit greatly from the flexibility that temporary staff can provide.

Agency workers are currently entitled to the minimum statutory rights enjoyed by permanent staff in the UK, including the minimum wage, the protection of the Working Time Directive, and statutory sick pay.

It is common practice, however, for employers to give temporary agency workers lower pay and benefits than their permanent staff. For example, they may pay them less for the same work than permanent staff, or not give them bonuses, overtime or shift pay.

But a new EC Directive means that all member states must give agency workers limited equal rights with the company's employees. The UK must implement the new law by December 2011 and the government has started a consultation process to obtain the public's views before drafting legislation.

The good news for employers is that the government has proposed certain limits to prevent the effect of the new law being too detrimental for them. They propose that:

The legislation will focus only on temporary agency workers, not permanent employees who are appointed through an agency;

Only agency workers who have spent 12 weeks with an employer doing substantially the same role should be given equal rights to permanent employees in a similar role;

Equal rights would apply only to pay and basic working conditions. This would include, for example, pay, overtime, bonuses, shift allowances, and holidays. Less basic rights, such as gym membership, enhanced maternity pay, private medical insurance or company pension scheme membership, would be excluded; and

Primary legal liability for breaching the agreement will rest with the employment agency rather than the employer. The employer will only become liable to be sued if it fails to provide information about its pay and conditions to the agency.

There are a number of challenges, however, for the hospitality industry, going through difficult times, in which many employers will have no wish to grant additional benefits to their temporary agency workers.

They may even feel that the new legislation takes away the benefit of using agency workers altogether, and turn to alternatives – such as using 'casual' workers on zero-hour contracts. In France, where equal rights law for agency workers has already been brought in, the number of agency positions available dropped by a reported 50%.

The new legislation is likely to result in greater costs to the hospitality industry as pay and benefits for temporary workers are increased in line with the legislation. It will also lead to a greater administrative burden in ensuring that records of information on the terms and conditions of agency staff and employees are kept and provided to agencies.

There are a number of suggested tips for dealing with the new legislation.

When the UK law comes into force – which could be any time before December 2011 – it is likely that you will need to start giving temporary agency workers the same pay and basic terms and conditions as your permanent employees doing a similar role, once they have been in that role for 12 weeks.

You will need to keep accurate records of the pay and benefits you give them so that these can be provided to agencies.

If you simply cannot afford to do this, it seems likely you will be able to take advantage of the rule that the employee must have spent 12 weeks doing a particular kind of work in order for the law to take effect: At 12 weeks, you have the option to stop using that particular agency worker; if the government's proposals are enacted, you will also be able to move a worker into a different role (for example, move wait staff to reception or cleaning duties) after 12 weeks, and thus start the 12 week period running again; finally, you may be able to stop using a worker for a certain period (perhaps two weeks) in order to restart the 12 week period.

To take advantage of the 12-week period, you should put careful monitoring procedures in place so that you are always aware when a temp is approaching the 12 week mark.

A final ray of sunshine is that, if the law is enacted in line with the current proposal, you do not need to be concerned that agency workers will gain the status of "employees" and have the right to bring claims against you such as unfair dismissal. You will still be able to end their contracts easily.

Eat Out Magazine July 2009