Agency Workers Regulations Come Into Force

4 October 2011

On 1 October 2011, the Agency Workers Regulations 2010 come into effect. These Regulations provide for agency workers to be put on the same basic terms as the permanent employees of their “hirer” after a qualifying period of 12 weeks.

Gareth Kervin, Partner at Kervin & Barnes Solicitors (Mayfair, London) says: “These regulations are a significant change for anyone taking on temporary workers”.

He added: “They are likely to make temporary agency workers a less attractive option for employers”.

The Regulations were published earlier this year but it is likely that their effect will still come as a surprise to many. Employers need to be aware that they cannot contract out of these obligations protecting agency workers.

An agency worker is defined as someone working under a contract of employment with a temporary work agency, who is assigned to a hirer to work temporarily under that hirer’s supervision and direction (i.e. a temp sent by an agency to a company).

The Agency Workers Regulations 2010 apply to employment businesses and not employment agencies. The term ‘employment business’ refers to an organisation that supplies workers to hirers for temporary work; whereas ‘employment agency’ refers to an organisation that finds permanent employment for individuals.

The Regulations will not apply to those who are employed directly by the end user/hirer. Nor will they apply to the genuinely self-employed or those employed on a managed service contract. Agency workers with employment arrangements via intermediaries or umbrella companies will, however, come under the Regulations.

Gareth Kervin, Partner at Kervin & Barnes Solicitors (Mayfair, London) pointed out: “direct employment of those who previously were agency workers is one way in which employers are likely to mitigate the impact of the Regulations”.

The Regulations provide for ‘Day 1’ rights for agency workers including the right to be informed of vacancies within the hirer’s organisation and access to on-site facilities such as a canteen, gym or child-care facilities.

More importantly, following a period of 12 weeks, temporary workers will be entitled to equal treatment in relation to the same basic terms including: pay, certain bonuses, rest breaks and annual leave.

The equal treatment of agency workers is in comparison to those directly recruited by the end user and the agency workers’ ‘comparator’ can be either an employee or a worker. There is a 12 week qualification period before the right to equal treatment kicks in. However, this period is measured in weeks and not hours or days. For example, an agency worker taken on for a half day every Friday would be entitled to the same basic terms as a direct recruit after 12 weeks.

The period of continuity is broken when there is a break or six weeks or more (during or between assignments in the same job) or the agency worker commences a new or substantially different role.

Gareth Kervin, Partner at Kervin & Barnes Solicitors outlined: “certified sickness absence and annual leave both pause the period of service”.

In the case of maternity leave, an agency worker’s continuity will continue to accrue for the intended duration of the placement or its likely duration if none was specified. Employers are not required to pay maternity leave benefits to an agency worker but the worker will have the right to time off for ante-natal appointments and the same health and safety duties as apply to permanent staff.

Gareth Kervin, Partner at Kervin & Barnes Solicitors outlined: “Liability under the Agency Worker Regulations lies with the temporary work agency. However, if an agency can show that they have taken ‘reasonable steps’ to obtain the relevant information from the hirer then liability will lie with the hirer”.

He added: “It is solely the end user’s responsibility to provide the Day 1 rights”.

Another way in which employers and agencies are seeking to avoid the impact of the Regulations is for the recruitment agency to take the worker on permanently.  This is known as the Swedish derogation.  Gareth Kervin, Partner at Kervin & Barnes Solicitors said: “this method would allow agencies to reduce the impact of the Regulations on themselves and the end users”. He added “agency workers, however, would be left in a position where they were not protected by the new Regulations as they could be placed on minimal terms between their assignments”.