The Agency Worker Regulations 2010 (the Regulations) will come into force on the 1st October 2011. As they are based on the principle of equal treatment between agency workers and staff recruited directly by the hirer, they are likely to have a significant impact on employers who regularly use agency workers.

Background to the Regulations

The Regulations are being introduced to implement a European Directive, which the UK must do before the 5th December 2011. The Directive enshrines the principle that agency workers should have the same basic working and employment conditions as staff recruited directly by the hirer. However because of the TUC – CBI Agreement, agency workers in the UK will have to wait 12 weeks before claiming equality of treatment in respect of pay and employment conditions. The Regulations were brought in by the previous Labour Government in January 2010, who decided that in order to give temporary work agencies and hirers time to prepare, that they would not become law until October 2011. The Coalition Government confirmed in October 2010 that the Regulations would become law, as originally planned in October 2011.

What do the Regulations cover?

The Regulations do not alter the employment status of agency workers. They are only concerned with 'equal treatment' between agency workers and staff recruited directly by the hirer who perform the same work.

Under the Regulations an agency worker is an individual "supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer", who either has a contract of employment with the agency or a contract to perform work and services personally for the agency. The Government proposes to issue guidance in Spring 2011 to clarify who is covered and not covered by the Regulations.

The Regulations give agency workers two distinctive rights:-

  1. The right from day 1 of their assignment to equal access to employment opportunities and collective facilities; and
  2. The right after undertaking the same role, for the same hirer, for 12 continuous weeks to the same basic working and employment conditions as if they had been recruited directly by the hirer.

From the first day of an agency workers assignment they have the right to be informed of any relevant vacancies with the hirer and be given the same opportunity to find permanent employment, as non-agency workers at the hirer's establishment. Hirers could fulfil this requirement by posting internal vacancies on the intranet or on staff notice boards and drawing agency workers attention to this during their induction. Agency workers will also be entitled from the first day of their assignment to have equal access to collective facilities such as a work's canteen or work place crèche.

After the agency worker has worked on their assignment for 12 weeks, they will be entitled to the same basic working and employment conditions as those workers recruited directly by the hirer. This includes pay, working time, rest periods/breaks and holiday entitlement. 'Pay' includes not only basic pay, but also holiday pay, overtime pay, shift allowances, unsocial hours premiums or bonuses, luncheon or transport vouchers and bonuses linked to individual performance (such as a piece work bonus). However certain payments are excluded. Agency workers will have no right to claim occupational sick pay, contractual notice pay, contractual redundancy pay, benefits in kind (company car allowances or health insurance) or financial participations schemes (i.e. share options). In addition after the 12 week qualifying period pregnant agency workers will have the right to reasonable and paid time off work to attend ante-natal appointments.

The 12 week period is the same for part-time as full-time agency workers. Time counting towards the qualifying period will be broken if the agency worker begins work on a new assignment with that hirer where the work or duties are 'substantially different'. In such cases the agency must inform the agency worker in writing of the type of work they will be required to do in the new role. Time which counts towards the qualifying period will also be broken where there is a break of 6 calendar weeks or more, either during or between assignments. In these cases, the agency worker will have to start to re-accrue their 12 weeks from scratch.

There are some absences which 'suspend' continuity. These include sickness absence of up to 28 weeks, annual leave and jury service. In those cases the agency worker gets to 'keep' the weeks already worked and can then add to them on their return to work. However time continues to accrue towards the qualifying period, during absences relating to pregnancy and childbirth or for workers absent on statutory or contractual maternity, paternity or adoption leave.

Given the importance of the 12 week qualifying period, it was feared that unscrupulous hirers would simply rotate agency workers between different jobs to prevent them from ever accruing 12 weeks. Therefore the Regulations also include specific anti-avoidance measures. Under the Regulations where an agency worker has carried out more than one assignment for the hirer and the structure of assignments was intended to avoid the equal treatment principle, an Employment Tribunal can hold that the agency worker is deemed to be entitled to equal treatment.

Claims and Remedies

Agency workers can bring a claim to an Employment Tribunal to enforce their right to equal treatment. The hirer is liable for any breaches which relate to access to collective facilities and employment opportunities. The temporary work agency is liable for any breaches relating to basic working and employment conditions (if responsible for the infringement). Tribunals can award compensation which takes into account any financial loss suffered by the agency worker. In addition, Tribunals can make an additional award of up to £5,000 for any breach of the antiavoidance provisions.

Agency workers also have the right to request that their agency provide them with a written statement giving information about the hirer's basic working and employment conditions. If the agency does not respond within 30 days, the worker can request this information directly from the hirer. The agency worker can also make a written request to the hirer concerning access to employment opportunities and collective facilities. An Employment Tribunal can draw an adverse inference from an agency's or hirer's failure to respond.

How should employers prepare?

In order to assess the likely impact of the Regulations on their workplace, hirers will first need to assess the number of agency workers they use, the number of assignments which last 12 weeks or more and whether there are differences between the employment terms and conditions and access to collective facilities between agency workers and those recruited directly.

Hirers will then need to consider how they want to deal with the likely impact. They could consider:-

  • Only having agency workers from one agency (thereby reducing the administrative burden)
  • Restricting assignments to less than 12 weeks – but the cost of regularly retraining staff will need to be considered.
  • Increasing direct recruitment of employees and/or the genuinely self-employed. There are also a number of practical steps hirers may wish to take:-
  • They could re-negotiate their contracts with agencies to apportion liability in the event of a breach of the Regulations and any Employment Tribunal claim.
  • Hirers who offer luncheon or transport vouchers could replace this with a staff discount, as this is excluded from the Regulations.
  • Line Managers and those in Human Resources should be made aware of the hirer's responsibility to respond to any requests for information from agency workers and procedures should be put in place to ensure any request is acted on.

Once the Government has issued guidance, we will update our readers via our newsflash emails