Prior to the General Election, the Conservatives said that if they came into power, they would get rid of, or at least heavily review, the Agency Workers’ Regulations, which are due to come into force next year.
At the time this was met with some scepticism as the UK is required by EU law to implement the Agency Workers’ Directive by December 2011, which did not give much scope to change or avoid the Regulations. Since the coalition came into power there had been speculation about the position, and last week it was finally announced that the Government have decided not to amend the Regulations after all, so they will come into force on 1 October 2011. So what do the Regulations say?
The Government has said the reason they are not going to interfere with the Regulations is because the current version came about through an agreement between the TUC and the CBI in 2008. The previous plan under the Directive would have given agency workers the same basic rights as other employees from the start, and the same pay after six weeks.
Instead, the Regulations provide for a 12 week qualifying period, after which agency workers are entitled to “equal treatment”. Although this sounds a significant change from the current situation, “equal treatment” in fact only applies in certain limited senses.
Agency workers will be entitled to the same “basic” terms and conditions as if they were employed directly by the organisation that has hired them. The “basic” terms and conditions are:
- Pay (including overtime and shift allowances, and potentially bonuses where these are linked only to short term individual performance)
- Duration of working time
- Length of night work
- Rest periods
- Rest breaks
- Annual leave
Hirers will be responsible for disclosing the relevant information to the agency in order for the worker’s terms to be comparable to the hirer’s own staff.
However, there are many areas which will not be affected by the Regulations:
- Sick pay
- Healthcare benefits
- Redundancy pay
- Maternity, paternity, adoption pay
- Share schemes etc.
- Bonuses where these are based on long-term performance
These therefore greatly limit the “equal treatment” principle in practice.
In addition to the above, from day one of an assignment, an agency worker will be entitled to the same access to canteen and similar facilities, childcare and transport services as a comparable employee of the hirer, unless the hirer can show objective justification to deny such access. The agency worker will also have the right to be informed about job vacancies with the hirer.
The 12 week qualifying period is subject to anti-avoidance measures. For example, there will need to be a gap of at least 6 weeks before a new assignment starts – if the gap is less than this, then continuity is only deemed to have been suspended during the break. The 12 week continuous service period will be broken if the agency worker starts doing a ‘substantively different’ role with the hirer, but will not be broken by periods of sickness of less than 28 weeks, or by maternity or certain other types of statutory leave. In addition, an Employment Tribunal can also consider whether there has been a “structure of assignments” designed to avoid the impact of the Regulations – if so, then the Tribunal can impose an additional £5,000 fine.
Although most of the responsibility for compliance will fall on the agency, both the agency and the hirer can be responsible for breach of the Regulations – for example, if an agency has made enquiries about the pay and benefits of the hirer’s staff, but the hirer has not given complete information, then the breach will be the hirer’s responsibility, or liability might be shared between the agency and the hirer.
In the year until the Regulations come into force, businesses will need to review their current use of temporary workers. How many of them are used for periods of 12 weeks or more? How much do they cost, and how much do the agencies pay them? It will be worth speaking to agencies to find out what impact they believe it will have on cost, so that you can consider your position.
Depending on the conclusions of your review, you may wish to consider how you deal with agency workers in future. For some that use agency workers only for very short assignments, the position may stay the same – they are a convenient short term resource. For those where agency workers may need to stay beyond 12 weeks, agency workers may still be a useful alternative to hiring direct. Some employers may wish to use only a small number of preferred suppliers, and set up systems for disclosure of information. Others may find that they prefer not to use agency workers if possible, and employ temporary workers direct – it will depend on what works best for each organisation.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected])