Hirers of agency workers should consider carefully up front whether and how the Agency Worker Regulations apply and seek to ensure the agency complies, given that a hirer can be held liable for breach and ordered to pay just and equitable compensation even if the agency is also at fault.

In London Underground Ltd v Amissah, LUL initially accepted the agency’s assertion that the ‘Swedish derogation’ applied to workers it supplied, disentitling them from equal pay rights under the Regulations. LUL later changed its view and started paying the agency on the basis that the workers were covered by the Regulations, plus an amount covering the previous underpayment. The agency increased the pay rates to the workers, but failed to hand over the underpayment for the earlier period and subsequently went into liquidation.

The tribunal had found LUL to be 50% responsible for the breach as it had acted too slowly in ensuring the agency rectified the error, and the Court of Appeal has now confirmed that it was appropriate to apportion the compensation to be paid on the same basis, ie 50% to be paid by LUL, notwithstanding that in effect this would mean LUL was paying twice having already given the funds to the agency. Given that it was LUL’s choice to deal with the agency, it (rather than the workers) should bear the burden of the agency’s dishonesty. It would only be in exceptional cases that just and equitable compensation would be less than the amount for which it had been held responsible.