Understanding the Agency Worker Regulations
This helpful guide explains what the Agency Worker Regulations on agency workers means for hirers who engage workers via a temporary staffing supplier. This legislation came into force on the 1st October 2011, therefore it is imperative that hirers understand the regulations, work closely with their agencies to minimise costs and put effective systems in place in order to adhere to them.
What are the Agency Worker Regulations?
The regulations derive from European legislation designed to give temporary agency workers parity in pay and employment conditions as they would have been entitled to had they been recruited by the hirer directly to do the same job. Whilst in other parts of the EU, this entitlement comes into effect from day one of an assignment, the UK has a derogation period of 12 weeks. This means the agency worker needs to be engaged for 12 weeks’ of service with the same hirer, in the same role, in order to qualify.
Definition – Agency Workers
The Agency Worker Regulations do not apply to workers who have found a ‘perm’ job with a client, even if they were introduced by an agency. The Regulations apply to individuals who meet the definition of an agency worker. The Regulations define an agency worker as:
- an individual;
- who is supplied by a temporary work agency to work temporarily under the supervision and direction of a hirer; and who
- has a contract of employment or any other type of contract (a contract for services for example) under which they provide their service personally for the agency
Workers who are genuinely in business on their own account (i.e. genuinely self-employed) will not be within scope. Workers working on managed service contracts (i.e. those where the supplier rather than the hirer, manages or directs staff such as in an outsourced IT contract or catering contract) are excluded. However they will be within scope of the Regulations if either (1) in reality, the hirer, rather than the managed service supplier, supervises and directs the staff or (2) they are supplied by another agency to the managed service provider.
When does an agency worker qualify for equal treatment?
Except for the Day One rights (detailed below) the agency worker is entitled to equal treatment once she/he has worked for 12 weeks in the same role at the same hirer. This is irrespective of the working pattern (e.g. full time or part time). It is also irrespective of which or how many agencies supplied the agency worker to do the same role at the hirer.
A new qualifying period will begin only if a new assignment with the same hirer is substantively different (and that does not mean simply changing a job title), or if there is a break of more than six weeks between assignments in the same role.
The qualifying period will be paused (rather than stopped) if the worker takes:
- a break of six weeks or less;
- certified sick leave for no more than 28 weeks;
- statutory/ contractual maternity, adoption or paternity leave; or
- time off for public duties (including jury service).
In other cases where an agency worker takes a break which is related to pregnancy or childbirth, or takes maternity, adoption or paternity leave, the agency worker will be treated as if he or she has continued working in an assignment.
It is clear that an agency worker does not have to work for 12 consecutive weeks via the same agency to qualify for the right to equal treatment. They can accrue the 12 weeks’ qualifying service over a much longer period of work and through more than one agency.
Definition – Equal Treatment
Agency workers will be entitled to the same basic working and employment conditions after 12 weeks of service in the same role with the same hirer. The entitlements include pay, duration of working time, night work, rest periods, rest breaks and annual leave. ‘Pay’ has been specifically defined as “any sums payable to a worker of the hirer in connection with the worker’s employment including any fees, bonus, commission, holiday pay or other emolument referable to the employment, whether payable under a contract or otherwise…” The definition of pay includes holiday pay, shift allowances, unsociable hours premiums, overtime rates, vouchers with a fixed monetary value, stamps and bonuses directly related to quantity and quality of the work carried out.
Who is liable for establishing equal treatment?
In most cases, this will be effectively dealt with via a recruitment agency’s grievance procedure. Where this fails, a pre-conciliation service will be available via Acas to minimise the number of claims that end up in an employment tribunal. The agency is liable for any breach of a right in relation to equal treatment for which they are responsible. However, they will have a defence if they have taken ‘reasonable steps’ to obtain the necessary information from the hirer. This means the hirer and the agency need to work together closely to share appropriate information to ensure the agency worker is receiving equal treatment. The agency worker regulations mean that the close relationship between business and agency becomes even more important.
What will the agency worker be entitled to after 12 weeks?
Agency workers are entitled to the same basic pay and working conditions. This includes the basic hourly rate and any additional entitlements that are linked to the work done by the agency worker during an assignment. It includes the same overtime and shift allowances, unsocial hours premiums, payments for difficult or dangerous duties and lunch vouchers. Bonuses which are directly attributable to the quantity of work done by an agency worker are also be included. Agency workers are also entitled to the same rest breaks and annual leave allowance.
Whilst the other benefits are only given after 12 weeks, there are some benefits which agency workers are entitled to from day one of an assignment. Firstly, you will need to ensure that agency workers are made aware of vacancies that arise in your organisation. Secondly, agency workers will also be entitled to access a number of collective facilities including crèche and childcare facilities, canteen facilities and the provision of transport services but access to these can be refused if there are ‘objective grounds’ for doing so. ‘Amenities’ e.g. subsidised gym membership, season ticket loans and childcare vouchers are out of scope.
How does the 12 week qualifying period work?
The provisions will apply after the worker has been engaged for 12 weeks regardless of their working pattern (e.g. full time or part time). A new qualifying period will only begin if a new assignment with the same hirer is substantively different, or if there is a break of more than six weeks between assignments in the same role. The 12 week qualifying period can be paused if the worker takes annual leave, takes certified sick leave or takes time off for public duties. The regulations include a complex set of anti-avoidance provisions designed to make it difficult for hirers to circumvent the qualifying period.