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The Agency Workers Regulations 2010: What your business needs to know!

The Agency Workers Regulations 2010 came into force on 1 October 2011.

Who is an agency worker?

– Any individual who works through any “Temporary Work Agency” (TWA) under the supervision and direction of a hirer.

Who will the Regulations cover?

– Traditional PAYE temporary workers paid by staffing companies;

– Individuals “employed” under overarching employment contract by intermediary organisations (sometimes called ‘umbrella companies’) and then supplied to hirers via staffing companies.

The following class of workers may also be considered as agency workers:

– Sole traders and interims operating intermediaries (unless genuinely self-employed);

– Personal service company workers (unless genuinely self-employed);

– Those supplied through managed service arrangements (where the supplier genuinely exercises supervision and direction).

Who will the Regulations not cover?

– Individuals who find work through a TWA but are in a business of their own account (where they have a business to business relationship with the hirer who is a client or customer);

– Individuals working on Managed Service Contracts where the worker does not work under the direction and supervision of the host organisation;

– Individuals working for in-house temporary staffing banks where a company employs its temporary workers directly (and they only work for that same business or service);

– Individuals who find direct employment with an employer through an “employment agency”;

– Individuals on secondment or loan from one organisation to another – this is usually where the main activity of the organisation seconding the individual is not the supply of individuals to work temporarily under the supervision and direction of another party.

What rights are they entitled to?

Day 1

From the start of the assignment, a worker will be entitled to:

– Access any shared facilities that the comparable employee/workers can access e.g. canteens, crèches and gyms;

– The same opportunity to apply for relevant vacancies as comparable employees/workers (unless the vacancy arises as a result of restructure).

Completion of 12 weeks

Once the agency worker has completed a 12 week qualifying period, an agency worker will be entitled to the same basic working and employment conditions as their comparators at the hirer.

These conditions relate to pay, working time, night work, rest periods and breaks and contractual annual leave.

Is there any pay that is not included?

YES the following pay is not included:

– Occupational sick pay (statutory entitlement not affected);

– Occupational pension;

– Occupational maternity, paternity or adoption pay (statutory entitlement not affected);

– Redundancy pay (contractual or statutory);

– Notice pay (contractual or statutory);

– Payments or rewards linked to financial participation schemes (such as share ownership, schemes, phantom share scheme);

– Bonuses not linked to individual performance;

– Discretionary, non contractual bonus payments which are not paid with such regularity that they have become custom and practice;

– The majority of benefits in kind (i.e. incentives for long term service);

– Payments that require a eligibility period of employment or service;

– Overtime or similar payments where the agency worker has not fulfilled qualifying qualifications;

– Payment for time off for trade union duties;

– Guarantee payments (i.e. for laying employees off);

– Advances in pay or loans; and

– Expenses.

When does the qualifying period accrue from?

– From 1 October 2011 on a weekly basis;

Does the period need to be consecutive?

No.

The following ‘absences’ will keep the qualifying period running:

– Pregnancy and maternity during a ‘protected period’;

– Statutory maternity, paternity or adoption leave.

Under what circumstances does the qualifying clock reset to zero?

– When an agency worker begins a new assignment with a new hirer;

– Agency worker remains with the same hirer but is no longer in the same role (substantively different role);

– Breaks between assignments of more than 6 weeks (which do not fall into any of the reasons pausing the clock.

When might hirers be liable?

Hirers may be liable for:

· A breach of obligations owed to an agency worker under the Regulations, if the tribunal thinks that the hirer was responsible. A tribunal can award compensation, taking into account the agency worker’s losses and an assessment of what is just and equitable.

· A failure to give certain information about their own workers’ or employees’ conditions when requested by a supplier or, in some circumstances, the agency worker. Although there is no express sanction for such a failure, the Regulations make clear that this would entitle the tribunal to draw an adverse inference, making financial compensation, or a declaration or request for action against the hirer, more likely.

Is there guidance to the Regulations?

Yes – the Department of Business Innovation & Skills have produced the guidance for the Agency Workers Regulations which is available at:

www.bis.gov.uk/assets/biscore/employment-matters/docs/a/11-905-agency-workers-regulations-guidance.pdf.

Please note: the guidance is not binding.

How do I comply with the Regulations if I am a Hirer of agency workers?

– Provide your agency with up to date information on your terms and conditions so that they can ensure that an agency worker receives the correct equal treatment, as if they had been recruited directly, after 12 weeks in the same job;

– You are responsible for ensuring that all agency workers can access your facilities and are able to view information on your job vacancies from the first day of their assignment with you. It is therefore a good idea to provide the agency worker with the employee handbook.

– Ensure if roles/duties of the agency worker change then you notify the TWA in writing that the role is substantively different and record details of the job requirements

How do I comply with the Regulations if I am a Temporary Work Agency?

– You need to ask the hirer for information about pay and basic working conditions (when it is clear that the agency worker will be in the same job with the same hirer for more than 12 weeks) so that they are treated as if they had been directly recruited to the job;

– Ensure you ask a new candidate for up to date information in respect to their employment history, to ascertain whether they have accrued the qualifying period for a particular role for a particular hirer;

– Ensure you check whether or not the hirer is part of a larger group/legal entity.

– If receive notification that the agency workers role has changed provide the agency worker with a description of the new role in writing. You must record details of the new vacancy and notify the agency worker, in writing, that their role has substantively changed and the qualifying period will start again.

How do I deal with pregnant workers?

– After satisfying their 12 week qualifying period they would be entitled to paid time off to attend to antenatal medical appointments/classes while on assignment;

– If no longer able to undertake the duties of the original assignment due to health and safety reasons then need to be found alternative work, paid at the same rate as the last assignment;

– If alternative employment cannot be found then the pregnant worker will have the right to be paid by the agency for the remaining duration of the original assignment. Note no payment has to be made if the pregnant worker has unreasonably refused suitable alternative work.

– You must be very careful as not to discriminate against women as otherwise would open yourself up to sex discrimination proceedings.

Is there an exemption from equal treatment provisions on pay (and holiday pay)?

YES

– Where a TWA can offer an agency worker a permanent contract of employment and pay the agency worker between assignments. This must be done at the commencement of the assignment and in writing;

– This will mean that the agency worker after 12 weeks in a given job, will not be entitled to the same pay as if they had been recruited directly;

– The TWA should explain the above to the agency worker so they make an informed decision and the contract of employment should contain a clause which reflects this;

– The rate of pay between assignments must be at least 50% of an assignment pay, at least National Minimum Wage (NMW) and calculated using a reference period.

Does the TWA have to do anything in between assignments?

YES.

During any period under the contract after the end of the first assignment under that contract in which the agency worker is not working temporarily for and under the supervision and direction of hirer but is available to do so:

– You must take reasonable steps to seek suitable work for the agency worker;

– If suitable work is available, you must offers the agency worker to be proposed to a hirer who is offering such work; and

– You must pay the agency worker a minimum amount of remuneration in respect of that period (the minimum amount).

Can TWA end a pay between assignment contracts?

Yes when they have complied with their obligation (detailed above) for no less than four calendar weeks during the contract.

You must pay 4 weeks pay before the contract can come to an end.

Can the agency worker make a request for information?

YES.

If the agency worker believes that their entitlements under the regulations have been infringed.

Does the TWA have to provide the information within a specified time period?

YES within 28 days of receiving the request. The response should be in writing.

What happens if the TWA does not provide the agency worker with the required response?

The agency worker can request the information from the hirer if he has not received the information from the TWA within 30 days.

If a Tribunal upholds an agency worker’s complaint what can they award?

– Financial compensation (minimum of 2 weeks pay);

– Where the tribunal find that there was a prohibited structure of assignments a tribunal can order additional compensation of up to £5,000;

– Make a declaration setting out the agency worker’s right in relation to the complaint;

– Recommend that the hirer/TWA take certain action to remove the adverse effect on the agency worker.

What is the TWA liable for?

Responsible for any breaches of rights in relation to an agency worker’s basic working and employment conditions.

Does the TWA have a defence?

YES

– If it can show that it took “reasonable steps” to obtain relevant information from the hirer and acted “reasonably” in determining the agency worker’s basic working and employment conditions after the qualifying period and for the remainder of the assignment;

– For these purposes, relevant information is information about the hirer’s basic working and employment conditions and the employment terms ordinarily included in the hirer’s terms of employment of comparable employees to the agency worker and why those employees are comparable.

What is the hirer liable for?

– For any breaches of rights in relation to an agency worker’s basic working and employment conditions;

– Any breach of their responsibility to provide access to collective facilities/amenities and access to employment vacancies.


Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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