25th June 2010
The agency workers directive has finally made its passage into UK law,
coming into force as the agency workers regulations next year. In this
article, Jenny Wilson and Helen Connor from the employment law team at Pinsent
Masons take a closer look at their impact
Demand for temporary staff is reaching a two-year high just as the Agency Workers Regulations 2010 (the "Regulations") come into force on 1 October 2011. They are designed to give agency workers equal treatment to permanent employees with regards to pay and other basic working and employment conditions after 12 weeks of working in a given role. The Regulations also include provisions relating to access to facilities, vacancies and changes to information and consultation requirements.
This is significant progress for agency worker's rights but implementing the new Regulations will be a demanding task for employers, combining the additional cost with further administrative implications. Government is expected to publish its guidance on the Regulations in due course.
Agency Workers Regulations - Key Provisions Q&A
Which types of workers will receive equal treatment with permanent employees?
Workers will receive equal treatment with permanent employees if they find work through an agency, whether they are employed by that agency or not. Self-employed contractors are not covered by the Regulations; however, workers supplied by "umbrella" companies are.
How can an employer prove that the agency worker has received equal treatment in relation to basic working and employment conditions?
The agency worker must be treated as if he/she had been recruited directly to the job. However an employer will be deemed to have provided equal treatment if they can point to a permanent employee with equivalent basic working and employment conditions.
What if other employees are paid more due to experience or level of qualifications?
Agency workers are entitled to the same treatment that they would have received had they been directly recruited as a permanent employee at the same time as they started their assignment, so any differences in pay or conditions which are due to these factors would not be unlawful.
How does the 12 week qualifying period work?
Agency workers are entitled to equal treatment after being in the same role for 12 continuous calendar weeks. Any week or part of a week during which the agency worker is on assignment with the employer counts towards the qualifying period.
Will employers be able to get around the 12 week qualifying period by deliberately moving agency workers into different roles e.g. every 11 weeks?
No, and if an employer wanted to start the 12 week period running again, the worker would have to start a new assignment. It would not be sufficient to give them slightly different duties or for them to have the same duties but work in a different department or for a new line manager. The Regulations include “anti-avoidance” provisions which stop employers from trying to get around the 12 week rule in this way. Employers may be fined up to £5,000 if they are caught doing this and it would also create bad publicity for the employer.
What if an agency worker is absent from work during the 12 week qualifying period?
Whether or not an agency worker’s absence from work counts towards the 12 week qualifying period depends on what type of absence it is. The table below summarises the effect of different types of absence:-
| Type of absence
| Effect on 12 week qualifying period
| Sickness absence
| Pause the clock for up to 28 weeks
| Annual leave
| Pauses the clock
| Shut downs
| Pauses the clock
| Jury service
| Pauses the clock
| Industrial action
| Pauses the clock
| Pregnancy and maternity-related absence
| Clock keeps running
| Maternity, paternity or adoption leave
|Clock keeps running
Will agency workers have a right of access to job vacancies?
Agency workers have the right of equal access to job vacancies and this occurs from the first day of employment, not after the 12 week qualifying period.
What about access to facilities?
The Regulations give agency workers the same access to collective facilities and amenities as permanent employees such as canteens, crèches, transport arrangements or gym access. This right also occurs from the first day of employment and the employer is responsible for ensuring this.
Who is responsible for ensuring that agency workers receive equal treatment?
Aside from access to facilities and details of vacancies, which will be the employer's responsibility, it is the agency’s duty to ensure equal treatment. However, if the agency has taken reasonable steps to obtain information from the employer but has not received this information, then the employer may become liable for any inequality of treatment. It is therefore very important that the employer complies with its legal obligations.
What about trade union representatives- what is their role now?
Union representatives will have an important role working with both the agency and the employer to ensure the Regulations are implemented correctly. Trade unions can have a constructive role in helping to facilitate the changes.
Is there a change to information and consultation rights?
The impact of the Regulations on existing employment law legislation has been little discussed to date. But after 1 October 2010 agency workers will have the same rights to information and consultation as permanent employees and will count towards the thresholds for representative bodies. Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) information on agency workers will also have to be included as part of the requirement to provide employee liability information. It will be a key consideration for employers to ensure that they include agency workers when providing any information to or about the workforce.
Potential Considerations for Employers
The government has estimated that after the introduction of the Regulations, the employment of each agency worker will require an additional one and a half hours of a HR manager's time. For example, to implement the wide definition of pay, which includes performance related pay, will require employers to assess and appraise agency workers, so that their pay will reflect their performance. This process will clearly require time set aside to complete.
Equally, amongst the payments agency workers may or may not receive, when designing reward packages employers should be aware that agency workers are not entitled to receive benefits in kind, such as a company car or private medical insurance, but may receive vouchers of a fixed value, such as lunch vouchers. This ambiguity will make benefit provision more complicated for employers, such that they may end up including all agency workers in all staff benefits, or somewhat drastically, employers could decide to remove the facilities altogether.
Employers concerned about their ability to maintain flexibility following the recession may try to find ways to reduce the cost of the Regulations on their business. It will be tempting to ensure that agency workers never pass the 12 week threshold, which is easier in theory than in practice, but employers must be aware of the consequences of trying to ‘beat the system’ including the £5,000 penalty and damaged trust among the workforce. Some employers may contemplate a change to direct recruitment or increase their use of self employed workers and managed service contracts or alternatively, if employers have sufficient purchasing power, they may negotiate exclusivity with agency suppliers to reduce the costs.
Positive Changes for Agency Workers
Differences in terms and conditions between agency and permanent employees often caused a lack of unity within the workforce and meant employers could cherry pick employees to take advantage of the minimal agency worker rights. Permanent employees received many more benefits than temporary workers and tensions arose between the two workforces. The confusing triangular relationship between agency workers and employers has long been a disadvantage for agency workers. Despite the challenge for employers of adapting to the Regulations, the benefits for agency workers and the advantages of a cohesive workforce should outweigh any initial inconvenience.
Trade Unions have fought hard to secure a fair deal for agency staff with the intention of ending the worst abuses. The Regulations are timely rules for unifying the workforce, particularly since the recession demonstrated that agency workers are vulnerable to dismissal and poor treatment.
Government guidance is still anticipated and we await further direction on the Regulations. This could be a longer wait than expected given the recent change in government. Arguably the Regulations are a significant signal that the EU is moving away from an approach to labour markets based exclusively on flexibility, but the improvement in treatment of agency workers and the unity within the workforce will make any loss of flexibility worthwhile. The ambition for all workers to have equal employment rights is not a new one and the Regulations are the first step towards achieving this goal. Trade unions are focusing on fairness and flexibility, two principles which are becoming ever more important to a successful workforce and economy.
Helen Connor and Jenny Wilson are from the employment law team at Pinsent Masons
Amendment: Please note that the original version of this article stated that the Agency Workers Regulations would be implemented in October 2010. This has now been corrected to October 2011.