On 6 May 2011, BIS published its final guidance on the Agency Workers Regulations 2010, which are due to come into force on 1 October 2011. We have set out below a summary of the key points.
The Regulations will apply to workers provided by temporary work agencies (broadly, these are agencies which supply individuals to work temporarily for hirers). The definition of agency worker is very narrow - to qualify, the agency worker must have a contract with the agency to perform services personally for the agency, so technically, if a worker does not have a contract with the agency or their contract is to supply services for the hirer rather than the agency, they would not be protected. The guidance does not address this issue. However, the guidance does include helpful illustrative examples of who will qualify as an agency worker for protection under the Regulations. For example, where a client outsources activities to a third party provider, the deciding factor is who supervises and directs the workers providing the service – if the client does, the workers may be in scope.
An agency worker is entitled, after 12 weeks working on a job for a hirer, to the same basic working conditions as they would have been entitled to had they been doing the same job and recruited directly by the hirer. The relevant terms and conditions covered by the Regulations include pay, the duration of working time, night work, rest periods, rest breaks and annual leave.
Pay includes basic pay, overtime pay and bonuses linked to individual performance. A simplified performance appraisal system can be used to measure agency workers’ individual performance for these purposes. Bonuses linked to the overall performance of the company or which are designed to reward loyalty and service, occupational pensions, sick pay and financial participation schemes are among the types of pay that are expressly excluded from the application of the Regulations. The guidance indicates that hybrid schemes (where the “pot” is based on company performance but the bonus is awarded on individual performance) are likely to be within the scope of pay, but the company performance element can be excluded. The final guidance is unclear as to the treatment of additional discretionary, non-contractual bonuses. However, we would suggest that such bonuses can be excluded unless they are made with such regularity that they have become contractual through custom and practice.
Equal treatment is not required until an agency worker has worked in the same role (whether on one or more assignments) with the same hirer for 12 continuous calendar weeks. The guidance includes helpful examples of breaks which reset the 12 week qualifying clock, breaks which make the clock "pause" and breaks where the clock continues to tick. The 12 week qualifying period is not retrospective, so an agency worker will only start to accrue the qualifying period from 1 October 2011, even if their assignment started before then – this gives companies a few more months to prepare for the changes.
Pregnant agency workers who have met the qualifying period are entitled to reasonable time off during working hours to attend ante-natal appointments, and hirers are under a duty to carry out health and safety assessments and make any reasonable adjustments.
The agency and the hirer will each be liable for any breach of rights in relation to an agency worker’s basic working and employment conditions to the extent that it is responsible for the infringement. Therefore, although not specifically required to do so by the Regulations, the guidance highlights that hirers should provide the agency with all relevant up to date information about the terms and conditions for their employees carrying out similar roles to the agency worker.
Certain rights are acquired by agency workers immediately from the start of their assignment, i.e. before they satisfy their period of continuity (“Day 1 rights”). These include being informed about any relevant vacancies at the hirer during the period of the assignment and being given access to the same collective facilities and amenities, such as a canteen or child-care facilities. The guidance clarifies that there is no requirement to offer access to off-site facilities provided by a third party e.g. subsidised access to an off-site gym.
The guidance emphasises that “Day 1 rights” are a hirer’s responsibility, so by 1 October, hirers must have a system in place for providing agency workers with access to and information about facilities (the guidance suggests an induction pack or providing this information via the agency), and to ensure that job vacancies are publicised in a way that agency workers can access.
This is the only element of the Regulations where less favourable treatment (e.g. excluding agency workers from a particular facility or offering more limited access) can be objectively justified. Cost, practical and organisational considerations are possible factors for justification, but the guidance warns that cost alone is unlikely to be enough to justify different treatment. Interestingly, the guidance states that where there are no comparable workers or employees, the entitlement to equal access to collective facilities and information on job vacancies does not apply.
The Regulations contain anti-abuse provisions to prevent a hirer from contriving to structure agency workers’ assignments in such a way as to avoid the workers acquiring rights. If a tribunal finds that an agency or hirer has taken such measures, it may make an additional award to a worker of up to £5,000. The anti-avoidance provisions only apply to agency workers who have completed at least two assignments or roles with the same or connected hirer. Therefore companies should be careful of creating a pattern of assignments for any individual agency worker which appears designed to deliberately deprive the agency worker of his/her rights, e.g. taking the same individual on for repeated 11 week assignments with gaps of at least 6 weeks between each assignment, or repeatedly rotating the agency worker into different roles. Helpfully, the guidance specifically states that there is nothing in the Regulations to prevent a hirer having a usual practice of releasing agency workers after 11 weeks or for using 11 week assignments so that the Regulations do not bite.
When an obligation to inform and/or consult arises in collective redundancy or collective bargaining situations or in a TUPE process, there will be a requirement to provide appropriate information on the use of agency workers.