UK: De-mystifying the Agency Worker Regulations

Last Updated: 20 June 2011
Article by Jennifer Skeoch

The Government has recently issued the final version of its guidance ("the Guidance") on the Agency Worker Regulations 2010 ("the Regulations"), which are due to take effect on 1 October 2011. The Guidance has been welcomed as providing some much needed clarity on the complex Regulations.

The Regulations will give temporary agency workers the right to equal treatment (as compared to permanent workers) in relation to basic working conditions after a 12-week qualifying period. Notably, the Regulations also give agency workers the right, from day one of an assignment, to the same access as permanent workers to certain facilities provided by hirers and information on job vacancies.

This note highlights the key aspects of the Regulations, and provides hirers with practical guidance on how the Regulations will affect them and what steps they need to take to ensure compliance.

To whom do the Regulations apply?

The Regulations give rights to temporary agency workers who:

  • have a contract of employment with/or contract to personally provide services for a temporary work agency ("TWA");
  • are temporarily supplied to a hirer by a TWA; and
  • when undertaking an assignment, are under the supervision and direction of the hirer.

The hirer (or the end user) is an entity that is engaged in economic activity and which books agency workers via a TWA.

The final party to the relationship governed by the Regulations is the TWA. The Guidance confirms that a TWA is a person in business (including public, private and not-for profit bodies) which supplies agency workers on a temporary basis to hirers.

The Guidance helpfully confirms that the Regulations will not apply to individuals employed on managed service contracts; in-house temporary staffing banks; or individuals who are genuinely self-employed. Notably, however, umbrella companies and other intermediary arrangements (such as a master or neutral vendor contract) will be covered by the Regulations.

What rights do the Regulations give?

The key effect of the Regulations is to give qualifying agency workers the same basic working and employment conditions as a comparator who:-

  • is recruited by the hirer directly without the services of the TWA; and
  • does the same job as the agency worker.

The agency worker is not entitled to equal treatment for all terms and conditions; only basic working and employment conditions. Basic working and employment conditions are those which are ordinarily included in relevant contracts (for example standard contracts, pay scales or structures, collective agreements, company handbooks etc.) of the end user.

Qualifying agency workers will have the right to equal treatment in relation to the following (which is not an exhaustive list):-

  • key elements of pay (with some specific exclusions);
  • duration of working time;
  • length of night work;
  • rest periods;
  • rest breaks;
  • annual leave; and
  • paid time off for ante-natal appointments.

"Pay" includes overtime payments; shift/unsocial hours allowances; bonuses or commission payments (directly attributable to the amount or quality of work done by the individual); and vouchers or stamps which have monetary value.

"Pay" excludes occupational sick pay; occupational pensions; occupational maternity, paternity and adoption pay; redundancy pay (statutory and contractual); notice pay (statutory and contractual); and, among other things, payment for time off for trade union duties.

Significance of 12-week qualifying period

One of the key aspects of the Regulations is the requirement for agency workers to "qualify" for equal treatment, by remaining on an assignment with the hirer for 12 weeks or more.

The 12-week qualifying period is triggered by working in the same job with the same hirer for 12 calendar weeks. Calendar weeks will accrue regardless of how many hours the individual works each week.

The Regulations provide for a number of circumstances in which breaks in an assignment do not prevent the agency worker from completing the qualifying period. It's helpful to think of the qualifying period as a clock which, in different circumstances; is reset to zero; paused, or continues to tick.

The qualifying clock will be reset to zero where an agency worker:-

  • begins a new assignment with a new hirer;
  • remains with the same hirer but is no longer in the same role; and/or
  • has a break between assignments with the same hirer of six weeks or more (subject to the circumstances covered below).

The qualifying clock will be paused where:-

  • there is a break for any reason which is no more than six calendar weeks;
  • there is a break of up to 28 weeks because the agency worker is incapable of work because of sickness or injury;
  • there is a break (of any duration) which is for the purposes of taking leave to which the agency worker is entitled (eg. annual leave); and/or
  • a break of up to 28 calendar weeks to allow the agency worker to perform jury service.

The clock will continue to tick (regardless of the duration of the break) where there is a break:-

  • due to pregnancy, childbirth or maternity (which takes place during pregnancy and up to 26 weeks after childbirth); and/or
  • due to the agency worker taking maternity leave, adoption leave, or paternity leave.

One key concept is that of an agency worker taking on a different role with the same hirer. For this to happen, the work or duties which make up the whole (or main part) of a new role must be substantively different to the previous role: there has to be a genuine and real difference to the new role.

The factors that may make work or duties substantively different include:-

  • skills and competencies used;
  • pay rates;
  • work location;
  • identity of line manager;
  • working hours; and (among other things)
  • training/qualifications required.

Furthermore, in order for the 12-week qualifying clock to be reset to zero in such circumstances, the hirer must notify the TWA in writing that the work or duties have changed. These details will then need to be passed to the agency worker.

Hirers should be aware that the Regulations specifically address arrangements that are put in place to avoid agency workers attaining the 12- week qualifying period. These anti-avoidance provisions will bite where a pattern of assignments emerge, which are designed to deliberately deprive an agency worker of their entitlement.

Who is liable for any breaches of the regulations?

Notably, liability for breaches of the equal treatment rights can rest with either the TWA or the hirer depending on who is responsible for the infringement. This means that both hirers and TWAs should ensure they have clear and wellmanaged procedures in place to ensure the relevant information is exchanged in a timely manner.

TWAs will have a defence to any claim for a breach of the right to equal treatment, where they can show that they took reasonable steps to obtain relevant information from a hirer, and treated the agency worker accordingly.

Where a hirer fails to provide access to services, and information regarding employment, to agency workers from day one of their assignment, they will be solely liable for such a breach.

What action do employers need to take?

Once the Regulations come into force, employers must ensure that any agency workers they are hiring have access to facilities provided to the employer's permanent workers (such as canteens, childcare facilities, etc.) and information on job vacancies. This access must be given on day one of an assignment.

After 12 weeks in the same job, agency workers will qualify for equal treatment relating to pay and other basic working conditions. Hirers must ensure that they have forwarded the relevant information to the TWA in advance of this date, and TWAs must ensure that agency workers are treated accordingly.

Will the Regulations affect the use of agency workers?

The radical changes contained within the Regulations may result in hirers reconsidering their approach to the use of agency workers.

Whether the Regulations apply to certain arrangements and, if so, what terms are covered by the equal treatment principle, are the preliminary questions to be answered, but are, by no means, straightforward.

Hirers will need to think carefully about the mechanisms in place for sharing information with TWAs, and ensuring compliance with the equal access rights contained within the Regulations. It is also likely that TWAs will have to increase their fees to hirers to cover any additional payments that need to be made by virtue of the equal treatment principle. Against this backdrop, hirers may wish to consider what other more cost effective options are available for the provision of short-term work.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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