The Government has published the final draft of its guidance for hirers and agencies on the Agency Workers Regulations 2010 (the Regulations). This comes into force on 1 October 2011.

The Regulations give temporary agency workers the right to the same basic working conditions, such as pay, working hours, overtime, breaks, rest periods and holidays, as permanent workers after 12 weeks working in the same role. In addition, from the start of an assignment, agency workers will be entitled to equal access to some collective facilities (such as staff restaurants and crèche facilities) and information on permanent employment vacancies. Equal treatment does not include pension provisions and occupational sick pay, however, nor will the Regulations change the employment status of temporary agency workers.

The Regulations provide that equal treatment with regard to most of the rights will not be acquired until an agency worker has worked in the relevant role for 12 weeks. To calculate the qualifying period, continuity will normally be broken when:

  • there is a six-week break between assignments in the same job; or
  • an agency worker takes up a new role with the hirer, where the whole or the main part of the duties in the new role is substantially different from the duties in the old role.

However, breaks due to illness, maternity or predetermined closure periods will not break the qualifying period and there are also anti-avoidance provisions.

In the Regulations, “pay” means basic pay, plus any fee, certain bonuses and commissions, holiday pay or other payment directly referable to the employment, such as overtime. However, pay does not include payments in recognition of the long-term relationship between permanent employee and employer, such as an annual loyalty bonus.

The Regulations do not cover the genuinely self-employed and individuals working through their own limited liability company or individuals working on managed service contracts should also be excluded.

All businesses that make use of agency workers should now be assessing the impact the Regulations may have on them. Arrangements will need to be made for compliance with the Regulations. Thought will need to be given to the cost implications on the business. Businesses may look to see whether they can pass any of the cost burdens on to the agency supplying the workers through reduced fees (which may be possible if they take a considerable number of workers). The Regulations may also affect businesses that do not use temporary agency workers themselves but outsource services to third parties, which in turn utilise temporary agency workers. Those service providers may look to pass on their increased cost and will be able to do so if the contract is costed on an “open book” basis. A review of the standard terms of engagement that a business uses with its preferred agencies is a key consideration.

The Regulations will have a significant effect on the relationships between the hirer, the agency and the worker. Now is the time to plan for the impact.