An employer's guide to the agency workers regulations

Anti-avoidance

The regulations include a provision preventing hirers and agencies from taking steps to avoid the equal treatment requirements. The effect of this is that if the hirer, or the hirer and connected businesses, structure an arrangement which prevents the agency worker from acquiring equal treatment rights, then the hirer and/or agency could be liable for an award from a Tribunal of £5,000.

It is ultimately for a Tribunal to decide whether there has been an attempt to structure assignments to avoid equal treatment and there are a number of factors that it would consider. However, the trigger for the anti-avoidance provisions to apply is either where an agency worker has completed two or more assignments with the hirer or completed at least one assignment with the hirer and one or more earlier assignments with hirers connected to the current hirer or has worked at least two substantively different roles with a hirer or a hirer connected to the hirer. A hirer connected to another hirer would typically be a sister company, subsidiary or holding company.

In determining whether the assignments have been structured to defeat the agency workers regulations, the Tribunal can have regard to the number and the length of assignments, the number of role changes the agency worker has had and whether the roles were substantively different as well as the length of any breaks between assignments.

Legitimately avoiding equal treatment

The regulations do allow for an exclusion from the right to equal treatment with pay. However, for this to apply, there has to be a permanent contract of employment between the agency worker and the agency and there are other specific requirements that need to be met, including the agency worker being provided with a minimum level of pay between assignments. If you wish to find out more about this derogation, contact your HR Rely advisor.

Agency Workers Regulations 2010

1 October 2011, saw the arrival of the Agency Workers Regulations 2010. The aim of the regulations is to provide agency workers with “equal treatment” in terms of basic working conditions when compared to permanent employees.

There are different obligations on both the agency and the hirer, but even where an obligation rests with the agency, this is likely to have an on-cost to the hirer.

Definitions

The regulations apply to temporary work agencies, hirers and agency workers.

• A temporary work agency (the agency) is a person in business, whether for profit or not and whether a public or private sector body, whose activity is:
  • the supply of individuals on a temporary basis to work for and under the supervision and direction of hirers; or
  • paying for, receiving or forwarding payment for the services of individuals who are supplied to work on a temporary basis to work for and under the supervision and direction of hirers.
  The regulations do not apply to a worker who is introduced by an employment agency to an organisation for permanent employment.
• An agency worker is someone who is supplied by the agency to work for and under the direction of a hirer on a temporary basis. The agency worker must have a contract with the agency, whether this is a contract of employment or a contract to perform work and services personally for the agency. If an individual is supplied through an intermediary body e.g. an umbrella company or a master vendor who manages the recruitment process using other agencies, the regulations will still apply.
• The regulations do not apply where a company directly employs its own staff on a temporary basis and uses them within the same business, nor do they apply to individuals who are in business on their own account.
• A hirer can be either a public or private body, whether operating for profit or not, to whom individuals are supplied to work on a temporary basis under the supervision and direction of that person.
• A comparable worker is someone who is doing the same or broadly similar work to the agency worker, is working for and under the supervision and direction of the hirer, and works at the same establishment as the agency worker (for access to vacancies and facilities), or (for access to facilities only and where there is no comparable worker at the same establishment) a worker at a different establishment who satisfies all the other requirements. The comparable worker must be an employee, although, if there is no employee who satisfies the above, then a worker of the hirer who complies with the above requirements can be used for the purpose of comparison.

Agency workers' rights

Day one obligation — access to employment vacancies and facilities

From the first day of an assignment, the agency worker has certain rights. They are as follows:

• Access to employment vacancies
  An agency worker must be told of relevant vacancies in the hirer during the assignment. The obligation is on the hirer to provide this information and any liability for failing to comply with this obligation rests with the hirer. The notification can be done by a general announcement in a suitable place. The draft Guidance currently provides that this will not apply to posts that are ring fenced in a re-deployment process.
• Access to on-site facilities
  An agency worker has the right to be treated no less favourably than a comparable worker in the hirer’s establishment in terms of access to collective facilities and amenities, unless the hirer can objectively justify the less favourable treatment. Examples of collective facilities and amenities include car parking spaces, canteen facilities, crèche, drinks facilities, etc. This does not entitle the agency worker to greater rights than an existing employee. Therefore, if the hirer provides access to a crèche to all employees once they have 6 months’ service, the agency worker should similarly have access once they have worked for the hirer for 6 months.

Liability for not complying with these two provisions rests with the hirer.

Information and consultation

As a result of the regulations, amendments will be made to existing legislation in relation to information and consultation. Agency workers will therefore count towards certain thresholds, including, but not limited to, statutory trade union recognition and de-recognition procedures and Information and Consultation of employees.

Information to workers' representatives

In certain circumstances, an employer will be required to provide “suitable information” on the use of agency workers to workers’ representatives.

Suitable information is:

• The total number of agency workers working temporarily for and under the supervision and direction of the employer;
• The parts of the undertaking where the agency workers are working; and
• The type of work the agency workers are carrying out.

This applies to, but is not limited to, the provision of information for collective bargaining purposes, the obligation to inform and consult on collective redundancies and the provision of information in a TUPE situation.

Agency worker rights after 12 weeks

The right to equal treatment

Once an agency worker has completed the qualifying period, i.e., 12 weeks (see below for an explanation of the qualifying period), they will be entitled to equal treatment in terms of basic working and employment conditions as if they had been recruited by the hirer. It will be the agency’s responsibility for providing equal treatment and it will be liable for a breach of the right. The agency will have a defence if it can show both that it took “reasonable steps” to gather the relevant information from the hirer to be able to provide equal treatment and, on receipt of such information, acted “reasonably” in deciding the agency worker’s basic working and employment conditions from the end of the qualifying period to the end of the assignment. Although there is no specific regulation requiring the hirer to provide the agency with specific information, if the breach of the equal treatment provision is due to the hirer, the hirer will be liable for the infringement.

Basic working and employment conditions are the following:

• Pay
  
  The draft guidance provides that this includes:
  • Basic pay;
  • Overtime pay, which can include any obligation to work a certain number of qualifying hours;
  • Allowances for shifts/unsocial hours or for carrying out hazardous duties;
  • Payment for annual leave over and above the statutory entitlements;
  • Bonus or commission payments which are directly attributable to the amount or quality of the work done by the individual e.g. achievement of sales or production targets. The draft guidance provides that the agency worker will be given the same opportunity to earn bonuses as the hirer’s employees, and therefore, if payment of the bonus is subject to particular criteria, e.g., achieving a production target, the agency worker would have to meet this criteria; and
  • Payments which are non-contractual and discretionary, but are paid sufficiently regularly to have become custom and practice and which do not amount to an excluded bonus.
  
  
  Excluded from pay are:
  • Occupational sick pay, maternity, paternity or adoption pay;
  • Notice pay and redundancy pay, whether contractual or statutory;
  • Occupational pensions;
  • Payments linked to financial participation schemes;
  • Discretionary bonuses that have not become custom and practice and bonuses which are not directly linked to the individual’s contribution;
  • Most benefits in kind;
  • Payments that required an eligibility period of employment, but the agency worker has not worked for the hirer for sufficient time to be eligible or the payment is dependant on an employee still working for the hirer when the bonus is paid and the agency worker has left at the point of payment;
  • Payment for time off for trade union duties;
  • Guarantee payments; and
  Advances in pay or loans.

Some organisations provide bonus payments dependant on an employee’s performance appraisal. How would this work for agency workers? The draft guidance allows a hirer to modify the appraisal process and use a shorter appraisal for agency workers. Many employers may be concerned that by including an agency worker in its appraisal process may indicate that the agency worker has employment status. The draft guidance specifically provides that where an agency worker has been included in the appraisal system for the purposes of this particular requirement, it will not affect their employment status.

• Length of working time, night work, rest periods and rest breaks
  
  An agency worker should be entitled to the same terms in relation to the above as the hirer’s employee. This means that if an employee would be entitled to greater entitlements than those set out in the Working Time Regulations, these should apply to the agency worker.
• Annual leave
  
  If the hirer’s employees have greater holiday entitlement than the statutory holiday entitlement, then this should also apply to the agency workers. The draft guidance provides that the additional holiday entitlement could be dealt with by paying the agency worker a lump sum at the end of the assignment or including it in the hourly rate.

• Pregnancy and paid time off for ante natal appointments

  Where an agency worker is pregnant, has recently given birth or is breastfeeding and the hirer has identified risks in those situations, it is under a duty to make adjustments to protect the worker from the risks or if this is not reasonable to advise the agency. It is then for the agency to stop supplying the agency worker to the hirer and to find the agency worker alternative work that is appropriate.

  A pregnant agency worker will be allowed time off by the hirer during her working hours to attend ante-natal appointments. It will be the agency’s responsibility for paying the agency worker but the worker will be required to advise both the hirer and the agency that she is pregnant. Both may request that this is in writing and may also ask for written evidence of ante-natal appointments, other than the first appointment.

The qualifying period

The qualifying period is a period of 12 continuous calendar weeks where the agency worker has carried out the same role for the hirer, whether on one or more assignments. The agency worker does not have to work for the whole week.

Continuity may be broken in the following circumstances:

1. Where the agency worker starts a new role that is substantially different.
   
   In order for this to apply, the agency worker must start a new role with the same hirer and the work or duties of that role must be substantively different from those of the old role. In addition, the agency must have notified the agency worker in writing of the work he will be doing in the new role.
   
   The draft Guidance provides that the following can help determine whether a role is substantively different: different skills and competencies are used, the pay rate is different, the work is at a different location, the line manager is different, the working hours are different, extra training or a specific qualification is required which was not needed for the previous role and/or different equipment is used.
   
   
2. Where there is a break of at least 6 calendar weeks during or between assignments.
   
   It is important to note that absences of less than six weeks will not break continuity, but instead will suspend it. There are also certain other absences, even though greater than six weeks, which will not have the effect of breaking continuity, but simply suspending it. These absences are as follows:
   1. Up to 28 weeks sickness absence, excluding absences related to pregnancy, childbirth or maternity;
   2. Statutory or contractual time off, excluding maternity, paternity or adoption leave;
   3. Jury service. This is subject to a 28 week period;
   4. A temporary cessation in the hirer’s requirement for workers to carry out the particular role at the establishment. In order for this to apply, the temporary cessation must be for a pre-determined time in accordance with custom and practice; and
   5. A strike or other industrial action or a lock-out.
   
   Other absences will neither break continuity nor suspend it. These are as follows:
   1. Absences due to pregnancy, childbirth or maternity up to 26 weeks after the birth of a child; and
   2. Absences on account of statutory or contractual maternity, paternity or adoption leave.

Agency workers' right to request information

Access to employment vacancies and facilities

If an agency worker believes that their right to access facilities or employment vacancies has been infringed then they may submit a written request to the hirer. The hirer has 28 days to provide the agency worker with a written statement providing the following:

• All relevant information on collective facilities, access to employment or the rights of comparable workers; and
• The reasons for the treatment given to the agency worker in relation to the right to collective facilities and/or access to employment.

Equal treatment

An agency worker does have the right to make a written request to the agency for information if they believe that they have not been given equal treatment. Where such a request is made, the agency must supply the agency worker with a written statement setting out specific information. This must be done within 28 days of the request. If the agency does not provide this information within 30 days of the request, then the agency worker can request that the hirer provide a written statement of its workers’ basic working and employment conditions. Like the agency, the hirer is required to provide this within 28 days of the request.

In any case where a party has failed to respond to a request, although the agency worker does not have a right to bring a standalone claim to the Tribunal, they can draw the lack of response, or an evasive response, to the Tribunal’s attention and invite it to draw inferences in other proceedings.

Remedies

If an agency workers believes that there has been a breach of the regulations, they may bring a claim in the employment tribunal. The time limit for bringing a claim is three months from the alleged breach. The claims that an agency worker can bring include:

1. That they have been dismissed (where employed by the agency) or subjected to a detriment because they have alleged that their rights under the regulations have been breached, they have asserted their rights, given evidence in relation to the regulations or brought proceedings under the Act.
2. That they have not been given access to employment vacancies or facilities.
3. That they have not been given equal treatment.
4. For pregnant agency workers, that she has been unreasonably refused time off for ante-natal care.
5. For pregnant agency workers, that she has not been paid by the agency or hirer when the work provided to her is terminated on maternity grounds.

Tribunals have power to make a declaration or a recommendation for action to be taken as well as compensation to be awarded. Where an agency worker makes a claim that they have been subjected to a detriment, the Tribunal may also make an injury to feelings award.