We last reported on the Agency Workers Regulations in our April Employment Brief, following the publication of the draft Agency Workers Regulations Guidance by the Department for Business, Innovation & Skills (BIS). In May 2011 BIS published the final Agency Workers Regulations Guidance and the Regulations remain due to come into force on 1 October 2011.  

To recap, the main provisions of the Regulations are as follows:

Day 1 rights for all agency workers

  • Access to the same collective facilities and amenities such as a staff canteen, food and drinks machines, creche and car parking, as are available to comparable employees or workers, from day one of an assignment. Access to facilities does not include off-site facilities or benefits in kind, such as subsidised access to an off-site gym.
  • From day one, agency workers have the right to be told of any vacancies within the hirer, in order to be given the same opportunity as a comparable employee or worker to find permanent employment with the hirer.  

Right to the same basic working and employment conditions following a 12 week qualifying period in respect of:

  • Pay
  • Duration of working time
  • Length of night work
  • Rest periods
  • Rest breaks
  • Annual leave  

Pay-related rights do not extend to:

  • Occupational pensions (as yet)
  • Occupational sick pay
  • Occupational maternity, paternity or adoption pay
  • Statutory and contractual notice pay
  • Statutory and contractual redundancy pay
  • Benefits in kind, such as company car allowance
  • Time off for trade union duties  

Calculating the 12 week qualifying period

The Regulations set out the circumstances which break continuity when calculating the 12 week qualifying period and those which do not, but which do not count towards the 12 weeks either.

Continuity will be broken when either: 

  • There is a substantive change to the agency worker’s job role with the same hirer, or the agency worker starts a new assignment with a new hirer 
  • There is a break of at least six calendar weeks during or between assignments  

Continuity will not be broken but weeks will not count towards the 12 week qualifying period where there is: 

  • Sickness absence of up to 28 weeks 
  • Statutory or contractual time off or annual leave 
  • Jury service of up to 28 weeks 
  • A break caused by a planned shutdown of the workplace by the hirer (for example, at Christmas, or Summer breaks for teachers) 
  • A break caused by a strike, lock out or other industrial action at the hirer's establishment  

Anti-avoidance provisions

It's not possible to contract out of the Regulations, although there appears to be nothing in the Regulations to prevent an agency worker being released after 11 weeks or for assignments of 11 weeks to be the usual practice of any hirer. However, anti-avoidance provisions have been put in place which address any situation where a "structure of assignments" develops, which is designed to deliberately deprive an agency worker of their entitlements.

A structure of assignments occurs when an agency worker has: 

  • Completed two or more assignments with the same hirer, or one with the hirer and one or more with another, or 
  • Undertaken two or more two roles during an assignment and on at least two occasions has worked in a role that was not the "same role" as the previous one, and
  • The most likely explanation for the structure of the assignment(s) is that it was designed to deliberately deprive the agency worker of their entitlements  

The Regulations also set out a list of factors that can be taken into account in deciding whether there has been such a structure of assignments, which includes:

  • The number and length of the assignments
  • The number of times the agency worker has worked in a new role with the hirer
  • The length of any break between assignments  

The anti-avoidance provisions give agency workers the right to bring a claim if assignments are structured in such a way to avoid the scope of the Regulations and where there has been a breach of these provisions, Tribunals will be able to make an additional award of up to £5,000.

Pay between assignments contracts: the Swedish derogation

Much has been said about the Swedish Derogation and how it provides a "work-around" for the Regulations, but does it? In a nutshell, the derogation will apply if:

  • The agency worker has an employment contract with the agency which includes terms covering:
    • Pay 
    • Work location 
    • Hours of work, and/or the minimum hours of work on the assignment, so long as the minimum is at least one hour 
    • The type of the work that the agency worker can expect to be offered
  • The contract includes a statement to the effect that the employee understands that by entering into the contract they lose their entitlement under the Regulations in relation to pay
  • During any period after the end of the first assignment, if the agency worker is available and waiting for work:
    • The agency takes reasonable steps to find suitable work 
    • Or if work is available, the agency offers the services of the agency worker to the hirer offering work, and 
    • The agency pays the agency worker a minimum amount respect of that period  

On the face of it, there appears to be more in it for hirers than agencies in adopting the Swedish Derogation, but it is probably not the complete solution for either. Amongst other things, it only provides an exemption from the entitlement to equal pay after 12 weeks and not the day one rights, and having a permanent contract with an agency would give agency workers significant employment protection rights and it must be likely that agencies will at least consider increasing their rates to reflect the greater level of responsibility and risk that they will assume as a result.

What next?

Many hirers will already be prepared for when the new Regulations come in to force, but for those not quite yet up to speed:

  • Carry out an audit of agency staff currently engaged in the company and check whether they are supplied by one or more agencies. Check what assignments they are working on and compare their circumstances to comparable employees.
  • Urgently work out a system to keep track of agency workers so that the qualifying period can be calculated correctly.
  • Provide agencies with copies of the relevant standard terms and conditions of employment, pay scales and annual leave entitlements of comparable employees.
  • Discuss with agencies what arrangements they have considered or might be prepared to offer, such as the Swedish Derogation model.

Downoad the Agency Workers Regulations Guidance from the BIS website.