UK: Equal Rights For Agency Workers In The UK

Last Updated: 28 October 2011
Article by Stephen Brown, Kathryn Donovan and Gretchen Lennon

From 1 October 2011 new regulations will come into force in the UK providing parity for agency workers with directly-engaged workers (usually employees) of the hirer (i.e. the entity that receives the services of the agency worker) regarding pay, working time, vacation and overtime. For those hirers to whom the Agency Workers Regulations 2010 (the "Regulations") apply, this could mean considerably increased costs, as well as the administrative burden of monitoring agency workers' service and of considering whether the work of the agency worker is comparable to work of individuals the hirer directly engages.

When do the Regulations apply?

The Regulations apply when one organization supplies labor to another organization in return for a fee based on the work performed by the agency worker for the "hirer". A typical example is an agency which supplies individuals to retailers during the holiday period to cope with seasonal shopping surges. The Regulations do not apply to organizations such as recruitment agents who provide an introductory service by matching job applicants to job vacancies.

The Regulations apply where:

  • The agency is engaged in the economic activity of supplying workers for temporary assignments (whether or not for profit), i.e. the agency supplies labor rather than an end product.

The Regulations would not apply, for example, to an architect who sub-contracts the task of building a wall to a building company. In this example, the supply is the wall, not the labor of the brick layers.

  • The workers supplied are under the supervision and direction of the end user.

The Regulations do not apply where, for example, a consultancy firm introduces a firm of I.T. specialists to a business to audit the business's I.T. systems. In this case, the individuals performing the services will have a large degree of expert knowledge and independence in conducting that audit, and so will not be under the supervision and direction of the business being audited.

  • The workers must have a contract of employment with, or a contract to perform work and services personally for, the agency.

The Regulations do not apply where the agency is in fact a client of the individual worker.

The Regulations are not intended to apply to genuine secondment arrangements, or to managed service contracts where the hirer does not supervise those working on the services. However, the Regulations include wide anti-avoidance powers, and UK employment tribunals are likely to scrutinize any such arrangements carefully, and issue penalties for anti-avoidance when they consider it appropriate to do so (these anti-avoidance powers are described in more detail below).

Equal Rights

The Regulations afford agency workers two categories of equal treatment rights:
1. Those that apply from the first day they are placed with the hirer
("Day 1 Rights"); and

2. Those that apply after they have accrued 12 weeks' continuous service with the hirer ("Week 12 Rights").

Day 1 Rights

From the first day of an agency worker's assignment to the hirer, the hirer must provide the agency worker with (i) access to on-site collective facilities and amenities, and (ii) information about all relevant vacancies in the hirer's organization.

In the example of an office with a discounted on-site staff canteen, agency workers are entitled to access the canteen and to purchase meals, but the Regulations do not entitle them to the discount provided to office employees. Similarly, if a company has an on-site gym, agency workers must be given access to it. If the company pays for its employees to use the gym next door, the company is not obliged to pay for its agency workers to use the gym as the gym is not an on-site amenity.

Week 12 Rights

If an agency worker has worked for the same hirer for 12 calendar weeks, the agency worker qualifies for equal treatment with individuals directly hired by the hirer as regards pay, duration of working time, vacation and overtime. Some breaks within the 12-week period restart the clock for the accrual of these rights, e.g. if the worker moves to a substantively different role within the hirer's organization, or the worker is supplied to a different hirer. Other breaks merely suspend the clock, including any break shorter than six weeks and any planned shutdowns of the hirer's workplace, e.g. over the holiday season. The clock will continue to run during breaks for maternity, adoption or paternity leave.

An agency worker who accrues the requisite 12 weeks' service may claim equal pay with a comparable individual who was directly hired by the hirer. For example, a retail assistant supplied by an agency for 14 continuous weeks may claim the same hourly rate of pay as a retail assistant employed by the hirer, but that right to equal pay only applies once that 12-week threshold has been passed. Note that the 12 week period applies to the agency worker working for the hirer, regardless of what agency supplied the worker. If the agency worker is supplied to the hirer for 6 weeks by one agency and for the following 6 weeks by another agency, the agency worker will then have accrued the necessary 12 weeks service. The definition of "pay" in the Regulations is wide, and includes bonuses that relate to performance or quality of work. These Week 12 Rights are enforceable by workers against the agency, not the hirer, and so agencies are likely to contractually oblige hirers to monitor the periods for which individuals are placed within their organizations, regardless of whether those individuals were supplied by that particular agency for the whole period of their work for the hirer. This also means that fees charged by agencies may increase to cover the risks to them of claims under the Regulations and agencies are likely to require hirers to indemnify them for any risk.

In order to aid agency workers in enforcing these rights, the Regulations impose obligations on both the agency and the hirer to supply information to the agency worker regarding pay, working time, etc., of directly-hired workers in the hirer's organization whose work is comparable to that performed by the agency worker, but these only apply if the agency worker requests it.


The Regulations contain considerable anti-avoidance measures to dissuade hirers from structuring assignments in ways designed to deprive agency workers of their rights, e.g. by artificially rotating them between jobs. If an agency worker is hired for 11 weeks by the hirer, hired again after a seven-week break and then, after another seven-week pause, hired for a third time, this could be regarded as an attempt to avoid equal treatment. Additional awards of compensation of up to Ł5,000 can be awarded where there has been an orchestrated avoidance of Week 12 Rights.

Exemption from requirement to provide equal pay

There is an exemption to the requirement to provide agency workers with equal pay, known as the 'Swedish Derogation', if a number of conditions are met:

  • The agency worker has a permanent contract of employment with the agency and is paid by the agency between assignments;
  • The agency pays the agency worker for at least four weeks of any gap between assignments and at a rate of at least 50 per cent of the highest level of pay the agency worker has received during the last 12 weeks of the previous assignment (and no less than national minimum wage);
  • The contract between the agency worker and the agency cannot be for 'zero hours';
  • The agency takes reasonable steps to seek suitable work for the agency worker;
  • If a suitable assignment is available, the agency worker must be given the option to be considered for it; and
  • The agency worker must be informed in writing by the agency that the equal pay provisions of the Regulations will not apply.

Even if the Swedish Derogation applies, the agency worker will still be entitled to all Day 1 Rights and all Week 12 Rights other than the right to equal pay.

The Swedish Derogation could be of particular value in the context of those working on outsourced services. Whether the Regulations apply to such individuals will be a question of fact in each case, and will require a consideration of whether the conditions set out in the "When do the Regulations apply?" section above are satisfied. If the Regulations are applicable, the Swedish Derogation would be one way to avoid the agency being required to pay those working on the outsourced services at the same rate as those directly hired by the service recipient (however, the other rights will still apply).


The hirer is liable for breaches of Day 1 Rights, and it has a defence if it can show that the difference in treatment was objectively justified. The agency is liable for breaches of Week 12 Rights, and it may defend this by challenging whether the directly engaged worker chosen as a comparator by the agency worker is actually doing comparable work; or by showing that it took "reasonable steps" to obtain relevant information from the hirer about employment terms ordinarily included for the hirer's comparable, directly-engaged workers. In the latter case, the liability would then shift to the hirer.

Where Week 12 Rights have been breached, agency workers can choose to bring claims for damages in the employment tribunal against either their agency or the hirer, because they will not know whether the liability for these Week 12 Rights has shifted. In determining any award, the tribunal will consider matters such as the seriousness of the breach and any financial loss caused to the agency worker. Besides awarding compensation, the tribunal can also make declarations or recommendations for action to be taken.

What should organisations be doing now?

The Regulations are likely to have a significant impact on certain UK employers, such as retailers, banks, manufacturers and others who engage agency workers on a regular basis. The key considerations for hirers and agencies will be the contractual provisions between them for (i) allocating the risk and cost of claims, (ii) designating responsibility for monitoring the periods of work, and (iii) sharing information about the rights of comparable directly-hired employees.

Employers can explore a number of options to minimize the impact that the Regulations will have on their businesses. We recommend that you:

  • Review your existing contracts with agencies, so as to ensure you have appropriate information to enable you to monitor your compliance with the Regulations and that the contract appropriately allocates the risks posed by the Regulations between you and the agency
  • Put systems in place to monitor the periods of time that each agency worker is engaged in your business;
  • Consider hiring temporary workers directly, rather than through an agency
  • Consider introducing qualifying periods for benefits for new recruits, i.e., a lower pay rate during a probationary period, being mindful of the UK age discrimination regime
  • Audit your employment benefits and consider whether they relate to output or length of service, whether they could be regarded as Day 1 Rights or Week 12 Rights, and how the Regulations would apply to them

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.