With the long anticipated Agency Workers Regulations due out in October, businesses who use this type of worker must prepare themselves for the potential impact these new regulations may have.
As a result of their implementation, agency workers will be given enhanced rights which will have a significant knock on effect on businesses that employ temporary workers.
The following article outlines how you should prepare for the introduction of the new legislation by detailing what the new regulations are, when they apply and the approach a good employment solicitor would take to ensure temporary workers remain a cost effective option for your business.
Who is covered?
In general terms the regulations apply to:
'those [agency workers] who are supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer'[1].
Who isn’t covered?
The regulations may not apply to:
- employment agencies that seek to provide permanent posts for workers;
- those working through their own company;
- those employed on managed service contracts; and
- those engaged on the new agency contracts..
What is a comparable worker?
A comparable worker is a person recruited directly by a company who is performing the same work as an agency employee.
What rights will agency workers have as a result of the new regulations?
Broadly speaking agency workers’ rights come in two parts – some on the day they begin work at your premises, known as ‘day one rights’ and some after 12 weeks, known as ‘12 week rights’.
Day one rights
These are the responsibility of the end user not the agency. However, in certain circumstances you may be able to refuse them if you have a justifiable defence.
Access to collective facilities and amenities
The end user is responsible for ensuring the agency worker has the right not to be treated less favourably than a comparable worker during an assignment in relation to collective facilities and amenities, such as:
- canteens or similar facilities;
- child care facilities; and
- transport services (including pick up/drop off services, but excluding season ticket loans and company car provisions).
Right to be informed of relevant vacancies
The end user must ensure the agency worker is informed of any relevant vacancies in the hirer’s organisation. The information may be communicated by means of a general announcement in a suitable place such as a public notice board or via the company’s intranet.
12 week rights
What are they?
The agency worker is entitled to the same basic pay and working conditions as those which would have applied if they had been recruited directly by the hirer as an employee. The relevant terms for these purposes include by way of examples:
- pay (pay would include a fee, bonus, commission, holiday pay or other employment referable to the employment such as overtime and shift allowances);
- duration of working time;
- night work;
- rest periods;
- rest breaks; and
- annual leave.
Exclusions to 12 week rights
The Agency Worker Regulations are unlikely to cover individually negotiated contract terms (where all are on different rates) or one off discretionary payments. Not all aspects of remuneration are included within the definition of pay and these exclusions include:
- sick pay;
- pension;
- maternity, paternity or adoption leave pay;
- redundancy pay;
- share option schemes / profit share schemes;
- any bonus, incentive or reward that is done to encourage loyalty or to reward long term service;
- payments for time off work on union duties;
- guarantee payments;
- any advances or loans;
- expenses; and
- any payment to the worker other than in that person’s capacity as a worker.
Where bonuses are linked to individual performance the agency worker will have right to parity. This means that hirers may need to devise performance appraisal measures in respect of agency workers.
Qualifying period required for 12 week rights
In order to qualify for the basic working and employment conditions, the agency worker must work for the hirer continuously for 12 weeks or more. During this period, they must also perform the same role.
Time spent working for the hirer prior to 1 October 2011 will not count for the purposes of accruing service and as such, the regulations are not retrospective.
Avoidance of the regulations
Specific provisions are set out in the regulations to prevent businesses from purposely avoiding the regulations by terminating assignments prior to 12 weeks and then re-engaging the services of a worker. The regulations specify that the worker will not lose the qualifying work relationship with the hirer in respect of:
- breaks of 6 weeks or less “for any reason”;
- sickness or injury absence of less than 28 weeks;
- pregnancy, childbirth, maternity leave, paternity leave, adoption leave (note: these specific periods count towards calculating continuity);
- statutory or contractual time off;
- jury service of less than 28 weeks;
- temporary lay off for a predetermined period of time according to the hirer’s custom and practice; and
- time off wholly due to a strike or lock out at the hirer’s premises.
Where the above circumstances apply, (apart from pregnancy, child birth etc where time continues to accrue) time starts to run again when work resumes and is added to work previously conducted to make up the 12 week qualifying period. For more detail see the DWP guidance.
The regulations seek to prevent hirers from using avoidance measures such as rotating work every 11 weeks and putting in place breaks of seven weeks between assignments.
Derogations
Agency contract
If the agency worker has a permanent contract with the agency provided that the contract satisfies certain conditions, the 12 week rights don’t apply. Again, look at the DWP guidance or seek advice from your solicitor. In this instance, the obvious issue is that the agency must then take on employment obligations. Nevertheless, the new regulations specifically set out this derogation and in some cases, it may be worth considering this avenue and seeking advice on how it works.
There are also other arrangements such as individually negotiated terms or all agency staff on site which may possibly (although there are no guarantees at present) exclude the application of the regulations but these do need careful analysis and advice. Any good solicitor should be able to provide detailed guidance on such matters.
Enforcement
The temporary work agency
The temporary work agency is responsible for breaches of the 12 week rights.
The temporary work agency will not be liable if it can show it took reasonable steps to ensure that the hirer complied with the obligations under the regulations.
The temporary work agency can escape liability if it can show that it obtained relevant information from the hirer about the basic working and employment conditions and acted reasonably in determining what the agency’s worker’s conditions should be at the end of the qualifying period.
The hirer/end user
The regulations specify that the hirer alone is responsible for any breach of Day 1 rights (access to facilities and information about vacancies). The temporary work agency is deemed to have little control over these rights.
Time limits
The time limit for instituting proceedings is three months from the date of the breach, or the last in a series of detriments. Tribunals have discretion to extend time on the more generous, just and equitable basis as apposed to the reasonable practicability test.
Right to Receive Information
Agency workers may make a written request to the temporary work agency for a written statement asking for details of any alleged breaches of the 12 week rights. The agency must respond within 28 days or receipt of the written request, providing any relevant information about basic working and employment conditions. If the agency has not responded within 30 days of the written request, the agency worker may submit a further request direct to the hirer. The hirer is obliged to respond within 28 days.
If the agency worker suspects a breach of day one rights, they may submit a written request for information direct to the hirer.
Remedies
Tribunals can make a declaration, award compensation and issue a recommendation for action to be taken within a set period. For a breach of the 12 week rights the award of compensation must not be less than two weeks pay. When avoidance is found, the tribunal may award an additional sum not exceeding £5,000. This is a punitive sanction without reference to the loss sustained by the agency worker.
What should we be doing now?
A good first step is to get together with your agency to identify where agency workers are operating, who is (if any) a comparable worker and what facilities and rate increases would apply.
In addition, systems must be set up by both the agency and the end user (that is you, the company who uses agency workers) to collate this information upon the engagement of agency workers to ensure obligations are fulfilled and liabilities assessed.
Note: This is a new and complicated set of regulations which could have a major effect on companies that employ large amounts of agency workers. Familiarising yourself with the Department for Work and Pensions guidance is a good starting point, but seeking advice from a specialist employment solicitor may also save you money in the long run.
[1] Agency Workers Regulations 2010