equal treatment for agency workers
Are you prepared?
16 May 2011
The Agency Workers Regulations 2010 are due to come into force
on 1 October this year. The time between the final regulations
being published and coming into force is intended to give agencies
and hirers enough time to familiarise themselves, budget and
prepare for the significant changes to their regulatory framework –
and they will need it.
Agencies and hirers will have new legal obligations, which, if
not complied with, could carry a hefty price-tag. Although final
guidance was published this month, there are still many unanswered
questions, complex definitions to come to terms with, and ambiguity
surrounding the exact obligations.
Key points of the regulations
Qualifying agency workers will have the right to receive ‘equal
treatment’ in respect of basic working and employment conditions
with permanent employees in the same position. Where the agency
worker is a unique hire and there is therefore no employee
comparator, agency workers will be entitled to any terms in respect
of relevant basic working and employment conditions which 'apply
generally' in the workplace.
Qualifying agency workers are those who have been in the same
position for the same hirer as a permanent employee doing the same
(or broadly equivalent role) for 12 calendar weeks, without taking
more than a six week break at any time during that period. Agency
workers may therefore qualify for protection under the regulations,
even if they have been supplied by different agencies through
different intermediaries, as long as they 'clock' 12 weeks for the
same end-user.
A minimum of six weeks' absence or being assigned to a
substantively different role with the hirer will count as a break
in service. (Sickness absence for up to 28 weeks will not break
service).
The regulations will not apply to the genuinely self-employed,
those employed on a managed service contract (where the agency
delivers an entire service for an end-user and will supervise and
direct the workers itself), in-house temporary staffing banks (i.e.
those employed by the end-user on a casual basis) or on secondment
arrangements. They will apply to agency workers contracted via an
‘umbrella company’ (i.e. where the agency acts as an employer to
agency workers who work under a fixed term contract assignment) or
other intermediary.
Equal treatment includes:
- basic pay and contractual payments (e.g. overtime and shift
allowances)
- bonuses or other incentive payments
- rest and break periods
- annual leave and contractual enhancements
- minimum working time rights
- improved protection for new and expectant mothers (such as
adjustments to working conditions and hours)
It excludes:
- occupational sick pay
- pension
- compensation for loss of office
- maternity pay
- redundancy and notice pay
- expenses
- financial participation schemes and ‘most’ benefits in
kind
But will hirers know which employee payments or benefits are
included? For example, the guidance states that lunch and childcare
vouchers are included, but what about staff discounts? What is
included is not clear-cut and, no doubt, cautious hirers will look
to offer agency workers such benefits if there is any doubt and
bear the extra cost.
The regulations also contain some 'day one' entitlements for
agency workers such as the right to receive information about job
vacancies, and the right to equal access to on-site facilities
(such as child care and transport services) from the hirer.
Responsibility for these rights lies with the hirer, not the
agency.
What claims could agency workers bring?
Regulations 17 and 18 set out the numerous claims that an agency
worker could bring in the employment tribunal for any
contraventions of the regulations, some of which have no qualifying
period.
There is nothing to stop companies dismissing agency workers
before the 12 weeks are up, to avoid being subject to the
regulations. However, if a company takes on the same temp three
times for 11 weeks, with six week breaks in between each work
period, this will be considered as illegal avoidance of the
regulations. In these circumstances, the agency worker will be
deemed to have completed the 12 weeks qualifying period and will
therefore be entitled to equal treatment. It may also attract a
fine of up to £5,000 on top of the loss of earnings and perks
compensation the tribunal will award the agency worker.
Liability of agencies and hirers
Regulation 14 states that the agency and the hirer will be
responsible for any breach of agency worker’s rights relating to
their basic working and employment conditions, to the extent that
it is responsible for the infringement.
But, how can responsibility be clearly allocated between the
agency and the hirer? Regulation 14(3) provides a defence for the
agency. The agency will not be liable where it can show that
it:
- took "reasonable steps" to obtain relevant information from the
hirer about its basic working and employment conditions
- on receipt of that information, it acted reasonably in setting
the agency worker’s terms and ensuring that the worker received
those terms
But how is an agency supposed to discharge their duty, other
than obviously paying the agency worker the same as the hirer’s
employees. What are reasonable steps? How can an agency ensure the
worker receives those terms from the hirer, e.g. the same rest and
break periods as employees? The guidance suggests that the agency
will not be held liable where a hirer fails to deliver entitlements
such as childcare vouchers or breaks that employees get as the
agency has no influence or role in providing access to such
entitlements.
When looking at whether the hirer is responsible, regard must be
had to the steps it took to provide information to the agency
worker.
The fact that agency workers can choose to bring a claim against
both their agency and hirer from the outset is not meant to be an
indication of joint and several liability but enables a tribunal to
identify the degree to which any party in a "chain" of
relationships is responsible for any infringement. How easy this
will be in practice is not clear, and could lead to wide
inconsistencies where it is unclear whether the agency or hirer is
at fault.
At first glance it is hard to see how a hirer could be
responsible if it has provided correct information to the agency
and the agency informs the hirer it is complying with the
regulations. But how will blame be apportioned where there is an
alleged lack of adequate monitoring/failure to request all relevant
information by the agency coupled with an alleged failure by the
hirer to ensure equal treatment of agency workers’ terms other than
pay?
Action for hirers and agencies to take
- familiarise yourselves with the definition of ‘equal treatment’
under the regulations
- carry out risk assessments to analyse how many agency workers
will fall within the scope of the regulations
- get policies and administrative processes in place to reflect
the requirements of the regulations
- agencies should start gathering information from hirers on
their basic working and employment conditions for all the
categorised employees whose work puts them in the same position as
the agency worker. which should ensure that agency workers are
given equal treatment, and hirers should ensure this information is
to hand
- agencies should also put in place reminders so that they can
check with the hirer if there have been any changes to terms and
conditions and pay rates which affect agency workers.
The content of this bulletin is provided for the purposes of
general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.