| Topic Index |
|---|
| Overview |
| Protection of agency workers |
| Agency worker regulations |
| Employment business and the end user |
| Resources |
Overview
- An agency worker is an individual who is employed by an employment business (e.g. a temping agency) to perform work for one of the employment business’s clients, sometimes referred to as the end user.
- An agency worker signs up with an employment business in order to work for one or more end user. They often undertake a specific piece of work or are engaged for a specific period of time. They are often referred to as temps.
- Employment businesses are often known as employment agencies although strictly speaking they can be two different things. An employment business is involved in the supply of temporary workers, whereas an employment agency is involved in permanent recruitment.
- Regulations introduced under the Agency Workers Directive will give agency workers the same basic employment rights as permanent staff after 12 weeks' service.
Protection of agency workers
- An agency worker’s protection depends on whether he or she is an employee or not; for example unfair dismissal protection applies only to employees. The agency worker may have recourse against either the end user or the employment business.
- The status of the agency worker requires the same considerations as for determining employment status in any other situation, namely mutuality of obligations, control over the worker, integration into the client’s organisation etc.
- Most agency workers will meet the statutory definition of a 'worker' and will be entitled to the rights given to all workers, e.g. protection against discrimination, entitlement to the National Minimum Wage and statutory holidays.
- Case law has established that most agency workers are not employees and have no right to redundancy payments or to claim unfair dismissal.
- Agency workers on contracts of up to 3 months duration are entitled to statutory sick pay.
- It will be rare (but not impossible) for a contract of employment to be implied between an agency worker and the end user.
- Employment businesses are not allowed to charge agency workers fees for finding them work. Some employment businesses provide additional services such as CV writing for which they may charge - but they cannot make the finding of work provisional upon the individual using one or more of their additional services.
- An employment business must agree with the worker the terms that will apply to him or her, including the type of work that the worker is looking for. The terms cannot then be varied without the worker’s consent.
- The employment business must give an undertaking that it will pay the worker for work performed regardless of whether the end user pays the employment business.
- Other terms that must be agreed include: whether the worker will be employed under a contract of service or a contract for services or some other contract; the length of notice that will apply; the rate of pay and the intervals at which payment will be made; and the amount of holiday the worker will be entitled to (normally the statutory minimum under the Working Time Regulations).
Agency worker regulations
- The Agency Workers Directive provides for equal treatment for agency workers.
- Regulations that will come into force in October 2011 will ensure that after 12 weeks in a given job agency workers will be entitled to equal treatment on basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer. The amount of hours or number of days worked during this 12-week period is irrelevant.
- ‘Equal treatment’ only apples to ‘basic working and employment conditions’ that are either formally set out in a contractual agreement, such as contracts of employment, pay scales and company handbooks, or terms that have clearly become established in the workplace. It does not apply to terms that do not fall within this definition.
- ‘Pay’ not only covers basic pay, but also other contractual payments directly linked to the work undertaken by the agency worker. This will include payment for overtime, shift allowances, unsocial hours premiums, and some commission payments and bonuses. It will not include occupational sick pay, maternity pay, redundancy payments, or company benefits such as share schemes or company car allowances. Agency workers would also not be entitled to join company pension schemes.
- Successive assignments with the same end-user will count towards the 12-week qualifying period, unless there was a 6-week break between them or the roles were substantively different.
- The genuinely self-employed will be excluded, as will those working through their own limited liability company and those on ‘managed service contracts’, but agency workers contracted to an umbrella company will be included.
- The regulations will cover workers placed on temporary assignments, where the individual's contractual relationship is with the agency (employment business) rather than the hirer. It will not apply to recruitment agencies where an individual is introduced with a view to permanent employment with a client company.
- From the Day 1 of their assignment agency workers will be entitled to information about vacancies in the hirer to give them the same opportunity as other workers to find permanent employment, and equal access to on-site facilities such as childcare, canteen and transport services.
- Agency workers will have the right to time off for ante-natal care, as well as a right similar to suspension on maternity grounds where health and safety risks prevent an assignment from continuing. Where this is the case, an agency will have to provide an alternative assignment or pay the worker for the likely duration of the original assignment.
- The regulations will not affect the employment status of agency workers and there is no statutory minimum notice period for agency workers. Employers will still therefore be able to terminate agency workers' contracts on less notice than employment contracts.
- The main liability for providing equality of treatment will lie with the employment agency and they will need to establish that they had taken all ‘reasonable steps’ to obtain the necessary information from the hirer and acted ‘reasonably’ in determining the agency worker's basic working and employment conditions. If an agency can establish a defence, liability will pass to the hirer.
- Tribunals will be given jurisdiction to hear complaints from agency workers who consider their rights under the regulations have been breached or that they have suffered a detriment for asserting their rights under the regulations, subject to a 3-month time limit from the date of alleged breach or detriment. Tribunals will be able to make additional awards of up to £5,000 against employers who breach the anti-avoidance provisions.
Employment business and the end user
- Employment businesses must enter into a written agreement with the end user, or client, which must include the following:
- clarification that the employment business is acting as an employment business
- details of any fee which may be payable to the employment business by the end user
- whether any refunds will be made in the event that the worker does not work for the end user
- the procedure to be followed if a worker is unsatisfactory
- Employment businesses are prohibited form providing agency workers to clients to replace individuals who are taking part in an official strike or other official industrial action.
- Transfer fees can be charged by the employment business if the agency worker is subsequently engaged on a permanent basis by the end user (temp-to-perm). A fee can also be charged if the worker is transferred by the client to another client (temp-to-temp) or if the worker is introduced to another client by the original client (temp-to-third-party).
Resources
Business Link
CIPD
Directgov
- Agency workers: entitlement to equal treatment - from day one
- Agency workers: what information should you get and when
- Agency workers: entitlement to equal treatment after 12 weeks
- Agency workers: pregnant workers and new mothers
HR Recruiters' Forum
- Equal Treatment for Agency Workers: A Guide to the Agency Workers Regulations 2010
- 12-point Guide to the Agency Workers Regulations
Local Government Employers
Worksmart (TUC)
Others
- Audio podcast from law firm Boyes Turner on the implications of the Agency Workers Regulations.
- Useful Q&A from Levi Solicitors LLP on scope of the Agency Workers Regulations.
Subscribers only - the employment team at 
