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Employment law update

10 February 2010
With the new Agency Workers Regulations laid before Parliament last month and further changes to employment law due in April this year, we take a look at what these mean for employers.

Agency workers right to the same conditions as employees

The Agency Workers Regulations 2010 come into force in October next year and will entitle agency workers to certain working and employment conditions, which already apply to employees, after 12 weeks in the role.

An agency worker is defined in the regulations as, "an individual who is supplied by a temporary work agency to work temporarily for and under the direct supervision and direction of a hirer"

This broad definition will cover virtually all temporary workers supplied by an employment agency. However, the legislation specifically excludes situations where the hirer or temporary work agency is effectively the client or customer of an individual engaged in a profession or business, so professional consultants are not covered by the Regulations.

When do agency workers become entitled to these conditions?

Once an agency worker has worked in the same role with the same hirer for 12 weeks, they will be entitled to the same terms and conditions as if they had been recruited directly by that hirer.

The 12 weeks is calculated on the basis that any week in which the individual works is counted as one week, even if this is just for a few hours. There is no requirement that the 12 weeks must be completed within any particular period, provided that the agency worker stays in the same role. This could mean that an agency worker who only worked once a month (for example) could build up the 12 weeks over a long period of time and so gain protection. Breaks of up to six weeks are permitted, provided that work is done in at least 12 weeks. Longer breaks will be allowed for other reasons such as maternity, sickness or jury duty.

Which terms and conditions does an agency worker become entitled to?

The agency worker will be entitled to the following after the 12 week period:

  • Pay, including any entitlement to fees, commission, bonuses and holiday pay; but excluding expenses, sick pay, pension payments, maternity/paternity pay and redundancy pay amongst others. Bonuses or incentives which are not directly attributable to the agency workers performance are not covered, for example there will be no entitlement to an annual bonus based on the hirers profits.
  • Terms relating to the duration of working time, night work, rest periods, rest breaks and annual leave. This means agency workers will become entitled to the same protection that employees and workers are entitled to under the Working Time Regulations, even though they are not directly protected.

In addition, agency workers are entitled to the following from the first day of their assignment:

  • Use of the collective facilities and amenities provided to employees and workers including canteens, child care facilities and transport services.
  • The right to be kept informed by the hirer of any relevant vacant posts within the hirer, so that they have the opportunity to find permanent employment.

What impact will this have on my organisation?

The new regulations will not have a substantial impact on the way many employers operate. Although employers may need to increase agency workers rates of pay, much of this burden may be shifted to the temporary work agency, which may result in lower profit margins if they have to increase the pay to their workers.

Many agencies market themselves as providing agency workers at a cheaper rate than the hirers own employees, so unless they are able to cycle agency workers out before 12 weeks, this marketing strategy may be impossible to achieve.

If agency workers are genuinely used on a flexible basis to provide cover where needed, these regulations will have very little impact, other than to ensure that they are paid at a comparable rate to employees or workers. Employers who use agency workers as a cheap source of labour may find they have more of a problem, particularly if they tend to pay lower rates for agency workers than they pay employees. This could lead to further expenditure on wages, or wasted time in cycling through and training new agency workers to ensure they do not reach complete the twelve week qualification.

What liabilities could my organisation face?

An agency worker can complain to an employment tribunal that they have not received the pay or other facilities they are entitled to under the regulations. An employment tribunal may:

  • Award compensation, which shall not ordinarily be less than two weeks pay
  • Award compensation for other expenses incurred by the agency worker as a result of the breach
  • Award additional compensation up to £5,000 if it finds that an agency worker has been moved between assignments to prevent them accruing the 12 weeks service.

Crucially, the regulations do not provide protection from unfair dismissal (save in limited circumstances where an agency worker is subjected to a detriment because he or she sought to rely on rights conferred by the regulations) so a hirer can still retain the flexibility of shedding agency workers when they are no longer needed.

The right to request time off for training and study

From 6 April 2010, employees in organisations with 250 or more employees will have a right to request unpaid time off for training.

How should an employee make a request?

Employees with 26 weeks service will be entitled to request time off for study or training for the purpose of improving their effectiveness at work and the performance of their employers business. In making a request, the employee must include certain information:

  • A statement that the request is made under section 63D of the Employment Rights Act 1996
  • The subject matter of the training
  • Where and when it would take place
  • Who would provide or supervise it
  • What qualification (if any) it would lead to
  • How the employee thinks the study or training would improve both the employees effectiveness in the employers business, and the performance of the employers business.

Can I refuse a request?

Employers can refuse a request if there are sound business reasons for doing so, for example, that the study or training is not beneficial to the employers business. Other grounds could include that the employer is unable to recruit additional staff to cover the employee, or work cannot be re-organised amongst other staff.

How should I deal with a request?

The procedure for dealing with such requests closely mirrors the existing procedure for flexible working requests, including the right for an employee to appeal against a decision.

The good news for employers is that they are not required to pay for the training / study (although they may choose to if it would benefit their business) or the employees salary for the time they take off.

If an employer is found to unreasonably refuse an employees request a tribunal can order limited capped compensation or that the employer reconsider the request. There is also protection against detrimental treatment for employees as a result of making a request.

We recommend that employers adopt a policy for dealing with requests, so that employees know the procedure for making requests and how they will be dealt with.

Paternity leave extension to 26 weeks

The right to take additional paternity leave will apply:

  • In birth cases, where the expected week of childbirth begins on or after 3 April 2011; and
  • In adoption cases, where the child is matched for adoption on or after 3 April 2011

Who is entitled?

Employees who have completed 26 weeks continuous employment at least 15 weeks before the expected week of confinement.

The employee must be the father of the child, or be the partner of the mother, and expect to have the main responsibility (other than the mother) for the childs upbringing. This requirement already applies to the existing scheme for statutory paternity leave.

The employee only becomes entitled if the childs mother returns to work before the end of her ordinary or additional maternity leave entitlement. The scheme is not intended to allow both parents to take leave at the same time, but is to provide flexibility so the father (or mothers partner) can take leave should the mother wish to return to work.

When can the leave be taken?

The additional paternity leave cannot be taken in the first 20 weeks after the birth of the child, and must be taken before the childs first birthday.

The employee must give at least eight weeks notice of their intention to take the additional paternity leave.

The employee must provide his or her employer with:

  • A leave notice setting out the childs date of birth or expected week of birth and the period for which the employee intends to take leave
  • An employee declaration stating that the purpose of taking leave will be to care for the child and that the employee is the childs father or partner of the childs mother, and will have the main responsibility for caring for the upbringing of the child (aside from the mother)

In addition to a mother declaration which is a written declaration by the mother setting out:

  • The mothers name and address
  • The date the mother intends to return to work
  • The mothers national insurance number
  • That the employee claiming the leave is the childs father or mothers partner etc
  • That the employee claiming is the only person (to her knowledge) claiming paternity leave in respect of the child
  • That the mother consents to the employer processing the information contained in the documentation

If the employer so requests, the employee must provide a copy of the childs birth certificate and the name and address of the mothers employer.

How long can the employee take?

The employee can take up to 26 weeks additional paternity leave, but must take at least 2 weeks if any is to be taken at all. The leave must be taken in one continuous period.

Is the employee entitled to paternity pay?

Virtually all employees who are entitled to statutory paternity leave will be entitled to statutory paternity pay. This is the same rate as statutory maternity pay (currently the lower of £123.06 or 90% of the employees weekly earnings).

Other rights

All the terms and conditions of employment except those relating to remuneration will apply throughout the paternity leave period. Thus the employee will still be entitled to any benefits such as a company car or childcare vouchers.

The employee will have the same right as a mother taking maternity leave to return to the same job under the same terms and conditions. The employee also has the right to attend work through keeping in touch days without the period of paternity leave ending early.

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