Time to Get Ready - The Temporary Agency Worker Regulations

On 1 October 2011 new legislation will dramatically impact the rights of temporary agency workers.
United States Employment and HR
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On 1 October 2011, the Temporary Agency Workers Regulations 2010 ("Regulations") will come into force in Great Britain. The Regulations implement the Temporary Agency Workers Directive 2008/104/EC ("Directive")1. Each of the 27 EU member states has until 5 December 2011 to implement the Directive through local legislation.

Whilst it is estimated that there are between three million FTE temporary agency works ("TAWs") and ten million TAWs working across Europe on a yearly basis, the implementation of the Directive in many EU jurisdictions will not amount to a significant change in law2. However, for the estimated 1.1 million TAWs in the UK, the UK's recruitment industry and the UK companies that hire TAWs ("hirers"), this new legislation will dramatically impact the rights of the TAW and the regulation of the tripartite relationship. For most businesses, the Regulations will mean an increase in the cost of using TAWs and liability transferring to them if they get it wrong.

Given the increased reliance on TAWs by organisations and companies operating in the UK coming out of the credit crisis plus the on-going scrutiny of permanent head count, you need to act now to understand the Regulations and what they mean for your business.

So What Do The Regulations Do?

The key changes and new responsibilities are as follows:

From Day 1

  • Hirers must ensure that the TAW has access to all collective facilities as an actual comparable employee or worker directly employed or engaged by the hirer.3 Any less favourable treatment will not be unlawful if it is objectively justified. The Guidance provides that this is intended to apply to a staff canteen, workplace crèche, staff room, car parking, food and drinks machines and certain transport services.
  • Hirers must ensure that the TAW has information about the organisation's job vacancies that would be available to a comparable employee or worker. The comparator here must be based at the same establishment.

After 12 Calendar Weeks in the Same Job with the Same Hirer4

  • The TAW is entitled to equal treatment in respect of certain pay and other basic working conditions as if they had been employed directly by the hirer. This includes certain pay and bonuses, duration of working time, night work, rest periods, rest breaks and annual leave. It does not need to be an actual comparator for this entitlement.
  • Pregnant TAWs will now be allowed to take paid time off for ante-natal appointments during assignment. The Regulations are not retrospective. Therefore, any TAWs who are already on assignment will only start to accrue the 12 week qualifying period from 1 October 2011. In order to meet the 12 week qualification requirement, the TAW only has to work for any part of any calendar week. Further, there are detailed rules in respect of circumstances in which breaks in the assignment of the TAW will not prevent him or her from qualifying for equal treatment. However, TAWs will be entitled to access facilities and information on job vacancies from day 1 of their assignment.

Other Rights & Requests For Information

  • The Regulations contain greater protections for pregnant TAWs and new mothers.5
  • In accordance with current legislation6, certain information must already be provided by the hirer to the agency. However, as of 1 October 2011 there will now also be additional obligations on both the hirer and the agency to provide information to the TAWs within certain prescribed time limits. Broader Information and Consultation Issues
  • TAWs who are not employed must now be included in an agency's counting to determine if it meets certain thresholds that trigger, amongst other things, certain information and consultation obligations.
  • Hirers will be required to provide information about its use of TAWs as part of its obligations to provide information in respect of collective bargaining, to inform and consult in a collective redundancy situation and to provide information under the Transfer of Undertaking (Protection of Employment) Regulations 2006.

Penalties For Failing To Comply

  • A fine of up to £5,000 if the hirer or the agency is held to be in breach of the anti-avoidance provisions.
  • A right not to be dismissed on certain grounds such as under or in connection with rights under the Regulations. Such a dismissal will constitute an automatically unfair dismissal for which there is no service requirement and it will be dependent on the TAW being employed.
  • A right not to be subjected to a detriment on prescribed grounds.
  • A right to bring a claim on the grounds of the breach of one of the other entitlements.

All claims must be brought within three months of the date of the act complained of.

What Do The Regulations Not Do?

  • The Regulations do not apply to the placement of individuals by an agency for permanent employment or the direct engagement of temporary workers by the hirer.
  • They only provide for equal treatment for certain basic terms and conditions. Therefore, the TAW will not be entitled to benefits which are designed to reward long service or loyalty for permanent staff such as private medical insurance, a company car, stock or share options or occupational pension contributions, maternity, paternity or sick pay. Further, there is an exemption from the equal treatment principle on pay only if the TAW is permanently employed by the agency and receives a certain amount of pay between assignments.
  • The Regulations do not give the TAWs employment status, prevent the hirer from terminating the assignment, require the hirer to make a redundancy payment to the TAWs or give the TAWs unfair dismissal rights.

Further Details

Last month the Department of Business, Innovation and Skills published its final form guidance to the Regulations7 aimed at helping agencies and hirers to understand their obligations under the Regulations (the "Guidance"). The Guidance explains:

  • Who is in scope and out of scope of the Regulations8;
  • How a TAW qualifies for 'equal treatment' and what it means9;
  • The tracking of the 12 week qualifying period;
  • The definition and determination of the rate of pay;
  • What constitutes 'pay'10; and
  • Information requests, liability and remedies.

So What Do You Need To Do Now?

The Regulations mean that you need to take the following five key steps:

1. Understand your current use of TAWs across your businesses in Europe.

2. Where you have TAWs in the UK, you need to consider how you will track and control their use in the future.

3. Consider how you will provide access to facilities and job information to TAWs from day 1.

4. Consider how you will gather information on the employment and working conditions of comparable employees and workers.

Speak to your agencies and decide how you will interact and contract with them

At a European level, you also need to be alive to your businesses' use of TAWs in different EU member states. If this is common practice, you need to obtain local advice to understand if local practices, procedures and documentation also need to change.


1 The Directive aims to harmonise protection of temporary agency workers ("TAWs") through the application of the principle of equal treatment and to address restrictions and prohibitions on the use of agency work in the European Union (the "EU").

2 Eurociett's paper 'The implementation of the Directive on temporary agency work' identifies only Bulgaria, Cyprus, Estonia, Lithuania and Latvia as having no specific regulation of TAWs and the UK and Ireland as the only member states with no equal treatment provision.

3 The comparison must be with an actual comparable worker doing the same or broadly similar work, working at the same location or another location owned by the hirer. If there is no comparator, there is no entitlement to equal treatment.

4 The Regulations and the Guidance contains additional provisions and explanation as to what is and will be deemed to be the 'same' job for the 'same' hirer and the rules in respect of circumstances in which breaks in the assignment of the TAW will not prevent him or her from qualifying for equal treatment.

5 The protections are triggered where there are health & safety issues in the work being carried out, the extent of the duty to look for suitable alternative work and the obligation on the agency to pay the TAW if no work can be found.

6 See the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (as amended).

7 A copy of the guidance can be found at http://www.bis.gov.uk/assets/biscore/employment-matters/docs/a/11-949- agency-workers-regulations-guidance.pdf .

8 The Guidance makes it clear that those in business on their own account, working through a managed service contract that is properly supervised by the service provider, those working as part of an internal temporary staffing bank, on secondment or loan will be out of scope of the Regulations.

9 There are detailed rules in respect of the 'qualifying clock'.

10 Included: basic pay, overtime payments, allowances for working shifts or unsociable hours, payments for annual leave, bonus or commission payments directly attributable to work actually done or quality, additional discretionary, noncontractual payments and vouchers or stamps that have a value such as luncheon vouchers or childcare voucher. Excluded: occupational benefits, redundancy pay, employee loans, bonuses attributable to loyalty or reward for longservice and expenses.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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