UK: Agency Worker Regulations - Preparing For The New Law

Last Updated: 12 July 2011
Article by Michael Bradshaw

The Agency Workers Regulations 2010 (the Regulations) will come into force on 1 October 2011. Despite the long lead in time for these Regulations (the legislation process effectively started in 2008) many organisations have not yet prepared themselves for the new rules. This is not least because the Government guidance was not finalised until last month.

What is an "agency worker"?

The Regulations adopt the definition of "worker" used in the Employment Rights Act 1996, and on the face of it is fairly narrow in scope. It covers those who have a contract of employment with the agency, or those who have a contract with the agency to perform work and services personally for the agency.

The Regulations will apply to the supply of temporary workers by agencies but not the supply of candidates for permanent employment. The definitions of "agency" covers the classic temporary work agency - an "employment business". It also covers other third parties who provide temporary workers and whether acting as intermediaries where an "agency" is involved or not. It will therefore cover umbrella contract arrangements.

Workers who are genuinely self-employed will be outside the scope of the Regulations. Determining who is genuinely self-employed will involve the usual employment law analysis and having a personal services company will not in itself be sufficient.

Direct hires will not be covered by the Regulations and nor will banks of workers or casual staff or contractors (without a personal services company) engaged.

Right to equal treatment

After a 12 week qualifying period, agency workers will be entitled to the same basic working and employment conditions as they would have enjoyed if hired directly by the hirer. The principle of equal treatment is limited to: pay, duration of working time, length of night work, rest periods, rest breaks and annual leave. "Pay" has a wide definition and will include commission, bonus based on individual performance, and holiday pay. There is no general right to protection against "less favourable treatment" as with the part-time worker and fixed term employees regulations. The Regulations also do not change the status of agency workers or give them more general employment rights.

The 12 week qualifying period

The main right to equal treatment does not apply until an agency worker has undertaken the same role, whether on one or more assignments, with the same hirer over a period of 12 "continuous" calendar weeks.

There are certain breaks in the assignment which will not break continuity. For example, in some situations continuity will be "suspended" so that the agency worker will be able to count the period prior to the absence towards the qualifying period (although not the period of absence). These are:

  • where the break is not more than six weeks;
  • sickness absence of up to 28 weeks (other than related to pregnancy – see below);
  • statutory/contractual time off – for example annual leave;
  • jury service of up to 28 weeks;
  • where there is a temporary break in the need for workers for a set period, such as teachers during school holidays;
  • if there is a strike, or other industrial action at the place of work.

In other cases, continuity will continue to accrue during the absence. This is if:

  • the worker is absent for reasons related to pregnancy or childbirth, for a protected period of up to 26 weeks after the birth of the child; or
  • if the worker is absent on contractual or statutory maternity, paternity or adoption leave.

Subject to anti-avoidance provisions, any other break of more than 6 calendar weeks will break the 12 calendar weeks required and restart the clock.

The time that counts towards the qualifying period can also be broken if the agency worker starts a new assignment with the same hirer where the "work or duties that make up the whole or the main part of that new role are substantively different from the work or duties that made up the whole or main part of the previous role". In order for this to apply, the hirer must inform the agency that there is a new role and provide written details of it.

Anti-avoidance provisions seek to prevent abuse e.g. where the hirer or agency structure assignments in order to ensure that the equal treatment provisions do not apply. Tribunals will be able to make an additional award of up to Ł5000 where a hirer and/or agency have been found to be in breach.

Applicable terms

The agency worker will be entitled to the basic working and employment conditions ordinarily included in contracts of employment with the hirer for such employment. These might be found in standard terms of employment, a staff handbook or a collective agreement, or even through custom and practice. Alternatively, if the agency worker is employed on the same basic working and employment conditions of a directly recruited comparator then the Regulations will be "deemed" to have been complied with. The comparator here is an actual comparator who is still in employment at the time the complaint is made, a former employee is not sufficient for these purposes.

Day 1 rights

Agency workers will also have certain "day 1" rights which are not subject to the 12 week qualifying period.

The agency worker will have the right to be treated no less favourably than a comparable employee in relation to access to canteen or other similar facilities, access to childcare facilities and the provisions of transport services. The agency worker will also have the right to be informed of vacancies in the hirer's organisation so that they may have the opportunity to find permanent employment. Liability for these rights will rest with the hirer.

Pregnancy and maternity

There will be equal treatment for agency workers in respect of pregnant women and new mothers so they will have the right to temporary changes or alternative work due to health and safety issues, as well as paid suspensions and reasonable paid time off for antenatal appointments. The Regulations do not give any right to equal maternity leave or pay.

Liability and information

Claims under the Regulations are brought in the employment tribunals. The hirer will be liable for a failure in respect of day one rights and may also be liable for equal treatment liability, to the extent it is responsible. This is because the tribunal can make awards against both hirer and the agency. Agencies will have primary liability for a breach of the equal treatment principle. However, an agency will have a defence if it took reasonable steps to obtain the necessary information from the hirer and acted reasonably in determining the agency worker's rights. The hirer may be liable where it is found to be responsible for the infringement, for example by failing to provide the required information on comparable terms and conditions.

An important practical aspect of the Regulations will be the requirement for information to be passed between the hirer, the agency and the worker. In particular the agency worker can make written requests for information relating to basic working and employment conditions and comparators from the agency (or the hirer in respect of day 1 rights). The agency will have 28 days to provide the information and if it is not provided, the agency worker can then request information from the hirer. Inferences can be drawn from a failure to respond or an inadequate response.

A requirement to provide information on agency workers will also be included in existing legislation on TUPE, collective redundancies and collective bargaining.

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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