Law guide: Employment

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The Agency Workers Regulations

The Agency Workers Regulations

Contents

The Agency Workers Regulations affect all organisations that supply or hire temporary agency workers (commonly referred to as 'temps'), who are under the 'direction and supervision' of a hirer.

The regulations give rights to temporary agency workers (TAW), which can be enforced at an employment tribunal against their agency and/or the hirer.

Pre-existing agency worker rights

Before the regulations came into force, agency workers already had the right to:

  • Receive the national minimum wage
  • Receive the paid statutory minimum holiday allowance
  • Statutory work-time breaks
  • Work no more than a maximum of 48 hours a week (unless agreed in writing)
  • Protection under health and safety legislation
  • Protection from discrimination

Rights granted by the regulations

Day one rights

Access to facilities and amenities

From the first day of an assignment, a TAW will be entitled to the same rights of access to the hirer's collective facilities or amenities as are enjoyed by a comparable worker working at the same location (or, if there is no such person, at another location used by the hirer). A 'comparable worker' is someone employed directly by the hirer who does broadly the same work or has broadly the same skills and qualifications as the TAW. Collective facilities or amenities include those provided by the hirer to its workforce as a whole or to particular groups. Examples might include staff canteens, common rooms, car parks, toilet/shower facilities, transport services or workplace crèches.

The facilities should be made available even if they are shared with another business and can extend to facilities that are based at another site occupied by the hirer.

This does not mean a TAW will get priority over other staff and does not include off-site facilities provided by a third party, such as subsidised gym membership.

Hirers can refuse access to facilities only if they can 'objectively justify' their decision by establishing it as both reasonable and proportional. Government guidance for England, Wales and Scotland and Government guidance for Northern Ireland state that it is unlikely hirers will be able to justify such decisions solely on grounds of cost.

Information on job vacancies

A TAW will also have a right to access information on job vacancies with the hirer. However, this is limited to those vacancies that would be available to a comparable worker working at the same site as the TAW, so not every vacancy must be communicated. However, such communication should be made simultaneously to the TAW and comparable worker.

This right will not affect a hirer's ability to control:

  • The qualifying criteria for the vacancy (such as qualifications or time in service with the business)
  • How applications are treated (there is no right for a TAW to have equal or preferential treatment).

This right will not apply if there is a genuine recruitment freeze, such as prior to a restructuring and/or redeployment of staff.

It is recommended that hirers provide details of the available facilities and vacancies to the TAW during their induction.

Alternatively, details of the facilities could be provided to the agency as part of the information regarding the assignment. Information regarding vacancies can be posted where they can be reasonably accessed by a TAW, such as on a notice board or an intranet.

Equal treatment rights

If a TAW works for a hirer in the same job for more than 12 calendar weeks, they will qualify to receive the same 'basic terms and conditions of employment' as a comparable worker.

The regulations state that these are terms relating to pay, duration of working time, night work, rest periods, annual leave and, for pregnant TAWs, paid time off for antenatal appointments.

A hirer should undertake a risk assessment in relation to a pregnant TAW just as it should do for its pregnant employees.

Pay includes:

  • Basic pay
  • Overtime pay
  • Bonuses and commission payments directly related to the amount or quality of work
  • Additional pay for working unsocial hours or for undertaking hazardous duties
  • Holiday pay
  • Vouchers or stamps that have a monetary value (e.g. luncheon vouchers)

For example, if a TAW is paid less than a comparable permanent worker, then after they have worked for 12 weeks they will be entitled to the same rate of pay.

Before the TAW qualifies for these rights, the hirer should provide the agency with details of the basic terms and conditions of employment of either a comparable permanent worker (if there is one), or (if there isn't) that the TAW could have expected to receive if employed directly by the hirer.

This should include information on:

  • The pay they can expect to receive
  • Any entitlement to additional pay for overtime, working unsocial hours or for undertaking hazardous duties and when or how they will qualify for it
  • Bonus schemes and how performance is appraised
  • Annual pay increases (e.g. when they take effect)
  • Offered vouchers or stamps
  • The annual leave allowance

Note that the regulations exclude entitlement to certain terms and conditions, such as:

  • Enhanced sickness, redundancy, maternity, paternity and adoption leave payments, i.e. more than the statutory minimum
  • Occupational pension payments
  • Benefits in kind
  • Payments which require staff to have worked for a minimum period (over 12 weeks) before qualifying
  • Bonuses which are not directly linked to performance, i.e. bonuses linked to loyalty or long service such as flat-rate bonuses paid to encourage loyalty

Right to information

Day one rights

The TAW should write to the hirer requesting information regarding their 'day one rights' before starting a claim at an employment tribunal for breach of the regulations.

The hirer has 28 days from receipt of the request to respond in writing with relevant information regarding the rights of a comparable employee and, if applicable, the reasons for the differing treatment of the TAW.

Equal treatment rights

If a TAW believes that they are not receiving their equal treatment rights, they should write to the agency requesting details of the basic terms and conditions of employment that they can expect to receive.

The request cannot be made before they become entitled to the equal treatment rights and must be made before starting a claim at an employment tribunal.

The agency has 28 days from receipt of the request to respond in writing with relevant information regarding the hirer's basic terms and conditions of employment (based on the rights of any comparable employee); any relevant information or factors taken into account when determining them (such as pay scales); and the reasons for any difference in the treatment of the TAW.

If the TAW has not received this within 30 days of their request, they can request the same information from the hirer who will also then have 28 days from receipt to provide a written response.

Calculating the 12-week qualifying period

A calendar week means 7 days, starting with the first day of an assignment. It does not matter how many hours the TAW works during a calendar week. Therefore, a TAW who starts on a Wednesday and works for 2 hours that day and no more up to and including the following Tuesday will have accrued one calendar week.

The regulations provide for situations when the number of calendar weeks will pause, continue to accrue or restart, whilst a TAW is accruing their 12-week qualifying period.

The number of calendar weeks will pause if there is a break in the assignment or between assignments:

  • Due to any reason and for no more than 6 calendar weeks, after which the TAW returns to the same job with the same hirer
  • For up to a maximum of 28 weeks due to the TAW suffering sickness or injury (unless related to their pregnancy, maternity or childbirth)
  • For up to a maximum of 28 weeks due to the TAW performing jury service
  • Due to the TAW taking any entitled leave, such as holiday
  • Caused by a regular and planned shutdown by the hirer of their workplace - such as over Christmas and New Year
  • Caused by strike action, lockout or other industrial action at the hirer's workplace

The number of calendar weeks will continue to run if there is a break in the assignment:

  • Due to pregnancy, childbirth or maternity-related absence, whilst the TAW is pregnant and for up to 26 weeks after childbirth or the date the TAW returns to work if earlier. This will include time taken off work for antenatal appointments or absence due to a pregnancy related sickness.
  • Due to the TAW being on maternity, adoption or paternity leave

The number of calendar weeks will restart if the TAW:

  • Begins a new assignment with a new hirer
  • Begins a new job with the same hirer that is 'substantially different' from the previous one and the hirer has given written notice to the agency of the new role and the job requirements and the agency has informed the TAW of this and that their qualifying period will restart.
  • Has a break in the assignment or between assignments of more than 6 calendar weeks.
  • Is performing jury service or is absent due to sickness or injury (other than due to their pregnancy, maternity or childbirth) for a period of more than 28 weeks.

What 'substantially different' means will depend on the circumstances, but it may include, though is not limited to, differences in:

  • The required skills
  • Pay
  • Workplace location
  • Working hours
  • Use of equipment

Who is excluded from the regulations

Generally, workers who are not under the direction and supervision of a hirer are excluded from the regulations. This may include:

  • Workers who are introduced through an employment agency but are subsequently employed directly (whether permanently or for a fixed period) or who are genuinely self-employed, have a business relationship with the hirer (the hirer is their client or customer) and are not under the hirer's direction and supervision - such as contractors or consultants including those that trade through an umbrella company
  • Workers who work temporarily but are recruited directly by (and work solely for) the hirer
  • Workers on secondment
  • Circumstances where a hirer has contracted out services performed on its premises to another business (such as catering) and that other business manages its staff

In the event of a dispute regarding whether a worker is excluded from the rights granted by the regulations, an employment tribunal will look at the reality of the working relationship and the true intentions of the parties and will not solely rely on the terms of any agreements made between them.

Consequences of failing to comply with the regulations

Contracting out or avoiding the regulations

Hirers and agencies cannot require TAWs to sign agreements which exclude their rights under the regulations.

Furthermore, the regulations contain anti-avoidance provisions which prevent a hirer or agency from implementing structures or practices which are intentionally created to deprive a TAW from qualifying for the new rights.

Types of claims

There are a number of potential employment tribunal claims that can be made against a hirer and/or an agency, which must be brought by a TAW within 3 months of an alleged breach of the regulations.

A hirer will be held liable for failing to provide for the 'day one rights' and, depending on the circumstances, may be jointly liable with the agency if a TAW's equal treatment rights have been breached.

TAWs are also able to make a claim if they have been subjected to a detriment (such as early termination of an assignment) by the hirer or agency because they have (or are believed or suspected to have):

  • Brought proceedings under the regulations
  • Given evidence or information in connection with another TAW's claim under the regulations
  • Made allegations of a breach of the regulations
  • Asserted or refused to forego their rights under the regulations.

A hirer or agency will also be liable if the TAW has suffered a detriment because they believed or suspected that the TAW intended to do any of the above.

Liability

An employment tribunal can order the hirer and/or the agency to pay compensation to a TAW if their rights under the regulations have been breached.

There is no limit to the amount that can be awarded, although generally it will be limited to actual financial loss or a reasonable amount if the loss cannot be quantified (such as if access to facilities are refused).

However, employment tribunals must award a minimum of 2 weeks' pay.

Awards of up to £5000 can be made against a hirer or agency if they have intentionally tried to circumvent the regulations.

Action points

The following actions are recommended if you are currently using TAWs or intend to do so:

  • Identify which facilities TAWs can use and the vacancies that they should be made aware of
  • Identify which TAWs are likely to work more than 12 weeks and calculate the additional costs that may be incurred (by comparing their basic terms and conditions with those of a comparable permanent employee). You should also consider whether there is any reasonable basis for not giving the TAW the same basic terms and conditions of employment as the comparable employee.
  • Put processes or systems in place that:
    • Inform TAWs of relevant or (if easier to implement), all job vacancies. E.g. through (limited) access to an intranet or access to a common notice board.
    • Inform TAWs of the facilities that they can access or use. E.g. by providing a list of facilities to the agency or as part of an induction).
    • Monitor and diarise key information or dates (e.g. how many qualifying weeks a TAW has worked; the date that they will qualify for the equal treatment rights; when information regarding basic terms and conditions, or amendments to them, should be sent to an agency; the time by which a TAW's request for information should be responded to)
    • Monitor the performance of TAWs and include them in appraisals (if necessary)
  • Provide training to managers and HR personnel.
  • Review contractual terms with the agencies and in particular ensure that there are terms dealing with how any joint awards made by an employment tribunal will be apportioned between you (to avoid potential further litigation) and how and when information required by the regulations should be exchanged
  • Consider using just one agency (where possible), in order to reduce the administrative burden

Reducing the effect of the regulations

Hirer's should also consider:

  • Ensuring that TAWs are only used for tasks/assignments that will genuinely not last more than 12 weeks
  • Increasing the use of overtime for existing staff
  • Increasing the use of self-employed contractors or consultants who fall beyond the scope of the regulations
  • Setting up a panel or register of individuals who can be recruited directly for temporary work
  • Outsourcing certain services to another business whilst ensuring that they do not get involved in supervising or directing their staff
  • Restructuring pay grades and entitlement to benefits so that they are based on achieving a certain amount of qualifying service
  • Restructuring bonus schemes which are based on performance or quantity of work done
  • Using staff discounts instead of monetary vouchers