What do the Agency Workers Regulations mean for employers?

11 September 2011
What do the Agency Workers Regulations mean for employers?

Here we provide a potted guide to the Agency Workers Regulations looking at what the regulations cover and highlight some issues employers may need to consider.

What is an agency worker?

Agency workers (often known as “temps”) are supplied by a temping agency to organisations (or “hirers”) and are covered by the new Agency Workers Regulations. The regulations do not apply to staff directly employed by the organisation, the self-employed or individuals working under managed service contracts.

The regulations come into force on 1 October 2011 and are not retrospective.

What do the Agency Worker Regulations provide?
 

From Day 1 of their employment, an agency worker will be entitled to:

 

  • the same access to facilities such as staff canteens, childcare and transport as a comparable employee of the hirer
  • be informed about job vacancies


unless there is some objective justification for not doing so.

After 12 weeks of continuous employment, agency workers are entitled to the same basic conditions of employment as comparable employees at the organisation. These are:

 

1. Pay (including salary, overtime and vouchers which may be exchanged for cash but exclude redundancy pay, contractual sick pay, maternity, paternity, adoption pay, loans and non-cash benefits).

2. Working time (eg working hours, breaks, night work)

3. Holiday entitlement

4. Paid time off for ante natal appointments

 

The regulations take effect 1 October 2011 therefore the earliest these equal rights may be claimed are the week commencing 25 December 2011.

 

What are the implications of the Agency Workers Regulations for an organisation?

The regulations aim to ensure an agency worker is engaged on the same pay and working time arrangements as a "comparable employee". The test here is a hypothetical one which asks: "what terms and conditions would the agency worker have got if they had been directly recruited into the role?"


An employee may be used as a comparator to the agency worker to make the demonstration of equal treatment simpler. This will be:

 

  • An employee of the hirer
  • Doing broadly similar work to the agency worker
  • At the same establishment as the agency worker; and
  • The comparator’s terms are consistent with those ordinarily included in relevant contracts of employment by the hirer.


Actions

What changes are required for employers that use agency workers? For agency workers engaged for less than 12 weeks, simple changes may be all that is required for compliance. For agency workers engaged in longer assignments, employers may decide to:

 

1. Do nothing – which depending on your particular circumstances may well contravene the regulations;

2. Give the same pay, working time, rest periods/breaks, annual leave and ante natal appointments as comparable employees but maintain the worker as agency staff. This may be more costly when VAT and the agency’s fees are factored in.

3. Take on the agency worker as an employee or worker at the organisation. This will give the individual greater employment rights (eg sick pay, redundancy pay).

Avoidance

The regulations have strived to make it as difficult as possible for employers to exploit loopholes in the regulations. For example:

 

  • Breaks of six weeks or less between assignments will not break continuity of the qualifying period
  • Sickness up to 28 weeks will not break continuity
  • Time off that relates to a statutory or contractual entitlement (eg maternity, paternity, adoption leave) will not break continuity
  • Jury service will not break continuity
  • Strike or lock-out will not break continuity
  • If the worker completes more than two assignments with the hirer (in the same or different roles), a tribunal would decide whether the pattern is best explained by the hirer trying to flout the regulations in which case sanctions will be applied.


Sanctions

Tribunals award compensation to claimants starting from 2 weeks pay per worker – calculated based on the loss incurred to the agency worker by the less favourable treatment. An additional £5,000 is awarded to each worker where the organisation has clearly tried to avoid the regulations. Claims must be brought within three months of the alleged breach.

For more information on the Agency Workers Regulations, including official guidance, see the agency workers section of HRBird.

Please note that HRBird by its very nature offers general information. If you're looking for advice specific to your situation, speak to an HR professional or solicitor. Got a question on staff or volunteers? To submit an anonymous query for the HRBird blog, contact us.



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