Gemma Roberts looks at whether length of service is relevant for the purposes of the AWR 2010

The Agency Worker Regulations 2010 (‘the Regulations’) came into force on 1 October 2011 and complaints arising from those Regulations are beginning to come before Tribunals.

Under Regulation 5, agency workers are entitled to the same basic employment and working conditions as if recruited directly to their role, after completion of a 12 week qualifying period. This article highlights a particular difficulty that arises when interpreting and implementing Regulation 5 in respect of rates of pay.

The Regulation

Regulation 5(1) provides that “agency workers” who are supplied by a “temporary work agency” are entitled to the “same basic working and employment conditions [relating to matters such as pay, rest periods, annual leave and the like] as they would be entitled to for doing the same job had they been recruited by the hirer … at the time that the 12 week qualifying period commenced”.

Regulation 5 Rights of the agency worker to the basic working and employment conditions

(1) Subject to regulation 7, an agency worker (A) shall be entitled to the same basic working and employment conditions as A would be entitled to for doing the same job had A been recruited by the hirer –

a. other than by using the services of a temporary work agency; and

b. at the time the qualifying period commenced.

The Problem

At first blush, Regulation 5(1) is tolerably clear, but upon closer consideration, it is open to various interpretations which are of material consequence for the individual agency worker, the agencies themselves and, of course, the hirer (who, ultimately, is likely to bear the wage cost of the agency worker).

By way of example, consider an agency worker who has worked in a role for the 12 week qualifying period and is therefore entitled to the same rate of pay as he would have received, if he had been recruited by the hirer, at the commencement of the qualifying period. The Regulations are not retrospective, so the qualifying period began for all on 1 October 2011 and ran to 31 December 2011. As of 1 January 2012, the agency was required to pay the agency worker at the rate that they would have been paid, had they been recruited by the hirer at the start of the qualifying period, on 1 October 2011. So far so good.

To crystallise the problem, assume the hirer employs some employees directly and also engages a number of agency workers to cope with fluctuating demands. The direct employees are paid according to a pay scale which reflects both length of service and quality of performance. The agency workers have been engaged in the same role for perhaps a couple of years, so would have moved some way along the pay scale if they were direct employees. Should the agency worker’s service with the hirer prior to the start of the qualifying period be taken into account? Is it legitimate to place the worker at the bottom of the pay scale, irrespective of the length of time spent in the role? Should the agency worker’s particular skills and expertise in the role, or otherwise, be taken into account? If the hirer’s rates of pay reflect quality of performance, is the agency required to obtain information on quality of the agency worker’s performance from the hirer?

The “Guidance” to the Regulations, released in May 2011 by the Department for Business Innovation and Skills, suggests uncontroversially, that if skills and qualifications influence the rate of pay of direct employees, the same must apply for the agency worker. However, the Guidance does not address the question of whether length of service or quality of performance in the post prior to the commencement of the qualifying period should be taken into account.

The learned editors of Harvey’s suggest that prior service in the particular role is relevant and should be taken into consideration – note the content of the parentheses:

….a qualifying agency worker is entitled to the same basic working and employment conditions as he or she would have been entitled to for doing the same job, had they been recruited (at the time that they were) by the hirer other than through an agency..

There are, as yet, no reported cases on the point. In my opinion, when determining rate of pay of an agency worker so as to comply with Regulation 5, the experience and qualifications of the worker generally must be taken into account (if the hirer takes account of such when setting rate of pay for its own employees); but the previous service of the agency worker in the post prior to the start of the qualifying period should not. If such prior service was a factor that should be taken into account, it would have been a simple task to word the Regulations appropriately.