In its consultation document, 'Implementation of the agency workers directive: a consultation paper', the Government sets out its proposed approach and seeks views on the following.
Who will be covered?
The Government suggests that the new regulations should apply to workers who find temporary work through an "employment business", not individuals who find permanent employment through an "employment agency", e.g. "headhunters" or theatrical agents. It would include individuals contracted to an "umbrella company", but would exclude workers who are genuinely self-employed, those working through their own limited company, or employed on "managed service contracts".
The definition of "worker" will be as set out in the Working Time Regulations 1998 (WTR) but adjusted to reflect the triangular relationship between the agency worker, employment business and hirer.
The Government also plans to exclude agency workers who have a permanent (open-ended) contract with the employment business whereby they continue to be paid between assignments by the employment business. This will be subject to a set minimum level of pay between assignments being maintained.
What is equal treatment?
Subject to a 12-week qualifying period, agency workers will be entitled to the same basic working and employment conditions as if they had been recruited directly by the hirer. These will include provisions in force at the hirer in relation to "pay" and "working time" (such as duration of working hours, breaks, holidays, night work etc). Occupational social security schemes are specifically excluded.
It is proposed that the definition of pay should be basic pay, plus other contractual entitlements directly linked to the work undertaken by the agency worker while on assignment. This will include payment for overtime, shift allowances, unsocial hours premiums/bonuses. However, the definition will exclude aspects of remuneration that are provided in recognition of the long-term relationship between employer and permanent employee such as profit-sharing schemes.
While agency workers already have protection in relation to many of the "working time" conditions under the WTR, a particular issue arises where the hirer offers enhanced contractual holiday entitlement. In relation to holiday entitlement in excess of statutory holiday leave, it is proposed that agency workers should be able to take that as a one-off payment at the end of the assignment. This option seems to be put forward on the basis that anything else will just be too complicated.
Agency workers will also have the right to equal treatment in relation to access to employment, collective facilities and vocational training. Importantly, these will not be subject to the 12-week qualifying period, but apply from day one. In relation to the right to be informed of vacant permanent posts with the hirer, this will not apply where existing permanent staff are being redeployed in order to avoid redundancies.
While the exclusion of occupational social security schemes under these regulations has been welcomed by the CBI, hirers need to be aware of other proposed legislation which will impact upon pensions and agency workers. In particular, the Pensions Act 2008 will require automatic enrolment into a "qualifying workplace pension" for all workers, including agency workers from 2012. For more details see our previous alert: Equal Treatment for Agency Workers.
Who will be compared?
It will first be necessary to identify the "given job", that being the job occupied by the agency worker. The Government expects this to largely be self-evident. Next, the issue of a comparator needs to be addressed. How this issue is addressed is one of the most significant of the outstanding questions.
It will be necessary for the agency worker to compare their actual position with their position "as if they had been recruited directly by the hirer to occupy the same job". The comparator should normally be a worker "doing broadly similar work in the same organisation". However, the precise legal test has yet to be determined. The Government is considering other factors where an agency worker will possibly not have to identify a specific individual comparator. Instead, comparison via existing pay scales for permanent staff and applicable collective agreements is being considered. It is not envisaged that comparison with workers in other organisations or in other geographical locations will be permitted. It is, however, envisaged that changes in market conditions will be relevant.
How will the 12-week qualifying period be calculated?
The 12-week qualifying period will be 12 calendar weeks regardless of the number of hours/days worked during the week, as opposed to '12 weeks of work' on a cumulative basis.
If during the course of an assignment the agency worker's responsibilities are substantially changed so as to genuinely amount to a different "given job", a fresh 12-week qualifying period can be commenced.
To avoid hirers getting round the regulations by simply terminating one assignment and re-engaging the same agency worker on a "new assignment", the Government is seeking views on the setting of a minimum duration of break between assignments covering what is essentially the same given job before the 12-week clock could be reset.
Who will be liable for breach of the regulations?
Primary liability for compliance will rest with the employment business, but because they will be reliant on information provided by the hirer it is suggested that they should have a defence in the event that they have taken reasonable steps or best endeavours to obtain information from the hirer. If the employment business has done this in good faith, but has been provided with inaccurate or incomplete information, then liability would pass to the hirer. It is not intended that specific provision will be made with regards to the information that needs to pass from the hirer to the employment business. Instead agency workers will have the right to ask the employment business for information relating to equal treatment in relation to a particular assignment.
Although primary liability under the regulations will fall on the employment business, hirers will not escape their impact. No doubt the risk of liability will be reflected in the rates and indemnities sought by employment businesses.
The consultation also seeks views on issues around "temp to perm" fees, protection of pregnant women and new mothers, thresholds for worker representative bodies and workforce agreements.
When will this come into force?
The current consultation runs until the 31 July. Thereafter, the Government will publish its response and then conduct a second stage consultation on the draft Regulations.
All EU member states are required to implement the necessary laws by 5 December 2011. The Government continues to state that it aims, if possible, to introduce the necessary legislation "in the current parliamentary session". However, the Government is seeking views on the implementation date, in light of the current "difficult economic times". In any event, given that we are only at the start of a two-stage consultation process, the earliest possible date for legislation to be introduced would be the end of the year with implementation in April 2010 and may well be later.