Agency Workers Regulations

The Agency Workers Regulations 2010 (as amended 2011) give temporary agency staff equal treatment with regards to basic working and employment conditions after 12 weeks of service in the same job.

Equal treatment under the regulations relates to basic working and employment conditions such as; working hours, overtime, breaks, rest periods, holidays and access to training and facilities, such as childcare. The regulations do not include pension provision and occupational sick pay, nor do the regulations change the employment status of temporary agency workers to that of permanent employees after 12 weeks.

The Regulations apply to agency workers performing temporary work through an employment business (TWA, Temporary Workers Agency).  They do not apply to:

• those seeking permanent or direct employment with employers;
• permanent employees;
• fixed term employees;
• casual workers hired direct by employers;
• independent contractors or consultants who are genuinely self employed working through their own personal service companies.

The Regulations give agency workers two types of rights:

12 week rights

The right, once they have worked in the same assignment for 12 weeks, to be treated, in terms of pay and employment conditions, as if they had been hired directly into that role at the start of the 12 week period. This is often referred to as the right to equal treatment after 12 weeks;

Day 1 rights

Rights applicable from day one of an assignment to:

1. be informed of any relevant vacancies within a hirer’s organisation;
2. access to collective facilities and amenities provided by the hirer.

The test to establish equal treatment in relation to a qualifying worker will be: on what terms would the agency worker have been employed by the hirer had the hirer employed them directly at the start of the 12 week period?

The hirer will need to establish and confirm to the TWA what it would have paid the agency worker had they employed him/her directly, taking into account that individual’s qualifications, expertise and experience. The test is hypothetical but if it can be shown that the treatment of the agency worker is consistent with the treatment of an actual employee within the hirer’s organisation (who is currently employed and doing broadly the same or similar work), the TWA will be deemed to have complied with the Regulations.

The onus, under the Regulations, is on the TWA to satisfy this test but the TWA will not be able to do this unless the hirer has been forthcoming with the information required. If the hirer is not forthcoming then the TWA will have a defence and the hirer may be liable. The relevant treatment for these purposes is whether the agency worker is given (after the 12 week qualifying period is completed) the same basic pay and working conditions they would have received had they been hired directly into the role. This entitlement is only in relation to the following:

• pay
• working conditions:

• duration of working time
• night work
•  rest period
• rest breaks
• paid annual leave

Pay means all sums payable in relation to the position in question (subject to some exceptions):

• salary or wages
• commission
• holiday pay (which includes statutory and occupational paid holiday)
• shift allowances
• overtime, antisocial hours or dangerous/difficult work premiums
• bonuses attributable to quantity or quality of work done (e.g. piece work and individual performance related bonuses)

Pay is not:

• Occupational sick pay
• Maternity pay
• Redundancy pay;
• Pensions, retirement gratuity or compensation for loss of office;
• Financial participation schemes including share option and profit sharing schemes;
• Bonuses and incentives not directly attributable to the quality or quantity of work done but which are given for some other reason such as overall company performance.

Holiday pay

If a hirer grants paid holiday entitlement in excess of the statutory minimum paid holiday entitlement (currently 5.6 weeks inclusive of public or bank holidays) this will need to be taken into account when matching an agency worker’s terms for equal treatment purposes.

Incentives and bonuses

There are a great many different incentive and bonus arrangements which makes this one of the more complex areas of the Regulations. Whether an incentive or bonus arrangement will need to be taken into account and matched in relation to a qualifying agency worker will depend on whether the arrangement relates to the performance of the team or company (i.e. it contains an element of distribution of a share of profits, options or shares) to which extent it is outside scope or whether the payment is directly attributable to the amount or quality of the work done by the worker (in which case it is in scope).

Benefits in kind are usually not pay and will not count. The exception will be where a benefit:

• has a fixed value expressed in monetary terms;
• is capable of being exchanged for money, goods and/or services. E.g. luncheon vouchers

12 week qualifying period

The right to ‘equal treatment’ does not apply to an agency worker until they have worked in the same role at the same hirer for 12 continuous calendar weeks (from 1 October 2011 onwards), regardless of their working pattern.

A new 12 week qualifying period will begin if there has been:

• a new assignment with a different hirer;
• a six week break between assignments;
• a new role with the same hirer which is substantively different from the previous one. (The TWA must have informed the agency worker in writing of the new role and type of work they will be doing in it.)

Some periods away from the workplace do not count towards the 12 week qualifying period or the six week break period but the agency worker will still be able to count the weeks worked before the absence. In other words the clock is paused during the following absences:

• up to 28 weeks sickness absence;
• statutory or contractual time off/leave excluding maternity, paternity and adoption leave;
• up to 28 weeks’ jury service;
• a temporary workplace closure according to established custom and practice e.g. Christmas shutdown;
• a strike or lockout or other industrial action at the hirer’s establishment.

In addition there are some absences which do count towards the qualifying period during which, therefore, the clock does continue to tick. These are:

• absences relating to pregnancy, childbirth, maternity leave or a protected period of up to 26 weeks after a baby’s birth;
• absences in relation to contractual or statutory maternity, paternity or adoption leave.

In other words during these absences it is as if the agency worker were in fact at work for the purposes of qualifying for equal treatment under the Regulations.

NB – the 12 week period is measured in relation to the agency worker performing the same role at the same hirer. It is not measured in relation to the supply of that worker through one TWA. A worker may be supplied into the same role at the same hirer by different TWAs totalling 12 weeks and the agency worker will acquire the right to ‘equal treatment’ at the points/he has worked that total 12 week period in the same assignment with the same hirer.

Anti avoidance provisions

The Regulations contain provisions which give an agency worker the right to be treated as if they have met the 12 week qualifying period if it can be shown that a hirer and/or TWA have used a pattern of assignments to deprive an agency worker of their rights. In such a case a tribunal may make an additional award to that worker of up to £5,000.

Day one rights

Liability for any breaches relating to day one rights (access to vacancies and collective facilities) will rest solely with the hirer.

12 week rights

The TWA is responsible for setting the agency worker’s terms and conditions. Any breaches in relation to their pay and employment conditions will rest with the TWA to the extent that the TWA is responsible for the breach. The TWA can only afford the agency worker the requisite pay and employment conditions however if the hirer has provided the necessary and correct information in the first place. Therefore if the hirer gives the TWA incorrect information or fails to notify the TWA of any change to any pay or working condition term the burden of liability will transfer from the TWA to the hirer.

Remedies for breach

An agency worker who feels they are not being given equal treatment in accordance with the Regulations may make an information request:

• to the TWA and the hirer in relation to 12 week rights; or
• to the hirer in relation to day one rights.

A tribunal can draw an adverse inference from any failure on the part of the TWA or the hirer to respond.

Exceptions

If an agency worker has a contract of employment with the TWA and is paid between assignments at least at 50% of the rate they were paid in their last assignment, then provided the contract meets certain conditions, the provisions in the Regulations relating to pay will not apply. This is often referred to as the ‘Swedish derogation’. It is likely to be most useful where there is a high demand for workers with particular qualifications, expertise or experience and a corresponding shortage of them.

Employment status

The rights the Agency Workers Regulations bestow on agency workers have no impact on their employment status in relation to the hirer. The entitlement to access the hirer’s facilities from day one and to equal treatment after 12 weeks will not make the agency worker the hirer’s employee.