Agency Workers Regulations Guidance Now Available - Human Resources

The long awaited draft guidance on the Agency Workers Regulations 2010 is now available. BIS will consider any comments by 15 April before finalising the guidance which is due to be published in final form at the end of April.

The guidance covers:

the scope of the Regulations
qualifying for equal treatment
pay
working time and holiday entitlement
pregnant workers and new mothers
pay between assignments
how to identify basic working and employment conditions
information, liability and remedies

The guidance is presented in an easy to read style. Some of the more challenging questions have not been addressed and will be left for tribunals and courts to tackle. With the draft guidance now available, hirers and temporary work agencies will be well advised to consider how the Agency Workers Regulations affect them, and take steps now to assess risk, make modifications to existing practices and otherwise ensure compliance in time for the 1 October 2011 implementation date.

To view the article in full, please see below:

Full Article

The long awaited draft guidance on the Agency Workers Regulations 2010 is now available. BIS will consider any comments made by 15 April before finalising the guidance which is due to be published in final form at the end of April.

The guidance covers:

the scope of the Regulations
qualifying for equal treatment
pay
working time and holiday entitlement
pregnant workers and new mothers
pay between assignments
how to identify basic working and employment conditions
information, liability and remedies

To view the guidance, click here.

The law changes on 1 October 2011 when the Agency Workers Regulations 2010 (the "Regulations") come into force. Agency workers will then qualify for equal treatment after 12 weeks in the same role with the same hirer regardless of whether they have been supplied by more than one agency for part of that period of time. Agency workers are also to be entitled to access to facilities and information on job vacancies from day 1 of their assignment.

Who is an agency worker?

The guidance attempts to deal with the scope of the Regulations by giving examples of those who are likely to be "outside the scope" or "in scope" of the Regulations. The examples indicate that most agency workers will be employees of the agency although some may simply have a contract with the agency and work under the direction and supervision of a manager within the hirer. Individuals on secondment or loan from one organisation to another, who are provided as part of a managed service contract, or those who are genuinely in business on their own account will be outside the scope.

Access to workplace facilities

The guidance gives examples of the sort of facilities which an agency worker may be entitled to access from day 1. These include canteen, crèche, staff common room, mother and baby room, prayer room, food and drinks machines and car parking. Agency workers are not entitled to "enhanced" rights and so if there are waiting lists for places (for example in the crèche) the agency worker would be able to join the list but not have priority treatment. The guidance recognises that agency workers may be treated less favourably in relation to facilities and amenities provided by the hirer if there is objective justification, in which case it will be for the hirer to show that the treatment in question is appropriate and necessary to achieve a legitimate aim.

Access to information about job vacancies

The Regulations provide that agency workers (from day 1) will be entitled to information about job vacancies within the hirer but, unlike the Temporary Agency Workers Directive, this is restricted only to those vacancies that would be available to a comparable employee/worker of the hirer. The guidance gives information as to who will be comparable for this purpose (generally, a current worker who is engaged at the same establishment and engaged in the same/ broadly similar work). Interestingly, the guidance also states that this obligation does not constrain a hirer in how they treat applications, or indeed from imposing qualification or experience requirements such that only an existing employee/worker of the hirer could comply. It is therefore questionable how much benefit this right will be to agency workers unless hirers take a positive approach towards it.

The 12 week qualifying period

The guidance makes clear the Regulations are not retrospective. Therefore for those agency workers already on assignment the qualifying period starts on 1 October. After 12 weeks in a given job an agency worker will be entitled to the same terms and conditions relating to the duration of working time, night work, rest periods ands rest breaks, annual leave and to be paid at the appropriate overtime rate as he or she would have received as a direct employee.

Many questions have been asked as to what events will break or pause continuity. The guidance provides some clarification:

The qualifying period will restart when an agency worker moves to a new hirer. New hirers are different legal entities. Where a hirer has multiple sites merely moving an agency worker from one site to another will not break continuity.
The time that counts towards the qualifying period will be broken if there is a substantive change to a job role within the same hirer. The guidance confirms that the whole or main role must be substantively different and there has to be a genuine and real difference to the role. The key factors that will determine whether a job is substantively different relate to changes in the skill set required to carry out a job and in the nature of the work and duties carried out. In the event of a dispute a combination of factors can be expected to be taken into account by a tribunal when establishing whether or not a role is substantively different, such as different skills and attributes, a new level of responsibility, a different line manager, a change of organisational unit or location, a change in working hours and pay rate.
Most absences (e.g. sickness) will pause the clock for service accrual purposes, but pregnancy and maternity, paternity or adoption related absences keep the clock ticking.

Pay

The guidance makes it clear that pay is defined as basic pay plus other contractual entitlements that are directly linked to the work done by the agency worker whilst on the assignment, i.e. "pay for work done". The guidance covers the possibility of payment in lieu for untaken holiday (over and above statutory leave).

Bonuses are a tricky area and the key question when deciding whether an agency worker qualifies for a bonus is whether it is directly attributable to the work which that worker has done. If a bonus is subject to an eligibility period of service then the agency worker is required to have the same period of service dating from the start of the assignment (not the end of the 12 week period). As assessing the amount of a bonus can depend on the performance of the worker the guidance covers performance appraisal systems. It states that although an agency worker may be entitled to the bonus that he or she would have been entitled to if hired direct to do the same job this does not mean that the same process for assessing performance need be followed. It may be appropriate for the hirer to modify the assessment process and to conduct shorter appraisals for agency workers. It also reassures employers that should a hirer choose to address this requirement of the Regulations by integrating an agency worker into an existing performance appraisal system this need not affect the worker's employment status.

The Regulations include an exemption from equal treatment provisions on pay where an agency can offer an agency worker a permanent contract of employment and pay the agency worker between assignments (i.e. during the periods when they are not working when there are no available suitable assignments for the agency worker). The minimum amount of pay between assignments must be at least 50% of the worker's basic pay while on assignment and not less than the national minimum wage. The exemption means that after 12 weeks in a given job the agency worker will not be entitled to the same pay as if they had been recruited directly. The guidance warns that this derogation as to pay is only in the context of a worker who has the comfort of employed status and enjoys the certainty of a fair level of pay where there is genuinely no assignment available. Any approach to deny workers their rights may lead to claims and one or more of the remedies available under the Regulations.

Working and employment conditions

The guidance on how to identify basic working and employment conditions is intended to identify the correct terms and conditions which apply. The requirement is to treat the worker as if he or she has been recruited directly to the same job as a comparable employee. If there is no comparable employee then the basic working and employment conditions are those which "apply generally" in the workplace. The guidance refers to terms and conditions, for example those set out in a company handbook or similar without fully elaborating on what "basic" really means. We expect this to be a source of future litigation, although the guidance points out that many claims will be low value and encourages settlement outwith the tribunal process.

Pregnant workers and new mothers

Paid (by the agency) antenatal appointments are a new right for pregnant agency workers, but of greater financial impact for the agency is the fact that, in cases where a hirer (who will be obliged to risk assess for the pregnant worker) cannot make reasonable adjustments to remove risks identified, the agency will be obliged to try and find suitable alternative work for the worker (at the same or better rate) failing which she will be entitled to be paid by the agency for the duration (or likely duration if not known) of the terminated assignment. This highlights one of the commercial impacts of the Regulations as between agencies and hirers, given that in many cases agencies are likely to try and build in protection against such costs to their terms with a hirer.

Enforcement and liability

The information requests, liability and remedies section makes it clear how much information must be supplied to the various parties and the time limits which apply. Agency workers can bring claims in employment tribunals and can be compensated for any loss of earnings related to their entitlements under the Regulations, or receive an appropriate level of compensation for example if they have been denied access to a facility. There is no maximum award but there is a minimum award of two weeks' pay regardless of any loss suffered unless the employment tribunal finds that the agency worker behaved unreasonably and the employment tribunal has the power to reduce the award if it is just and equitable. The Regulations contain anti avoidance provisions designed to prevent the structure of assignments that are put in place to intentionally circumvent the Regulations. Here the remedy is an additional amount up to £5000 made against the hirer or agency or split between the parties in a way the tribunal considers just and equitable. The agency worker must have completed at least two assignments or two roles in substantively different roles which break the qualifying period with the same hirer or connected hirers within the same group in order for the anti avoidance provisions to become relevant. Even then the tribunal will have to decide whether the pattern of assignments indicated an intention to deprive the worker of his or her rights.

Taking account of agency workers

The guidance concludes by covering the additional administrative procedures that may be necessary to ensure that agency workers are taken into account for calculating thresholds for the establishment of information and consultation forums (under the Information and Consultation of Employees Regulations 2004) and in other situations, for example the information to be supplied in a TUPE transfer will have to include suitable information relating to the use of agency workers.

There is action that can be taken to mitigate the impact of the Regulations on business, and hirers and agencies who have not already done so should act quickly to prepare for their implementation.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 06/04/2011.

UK: Agency Workers Regulations Guidance Now Available