The Agency Workers Regulations 2010 (‘AWR’) come into force on 1 October 2011 and will have a big impact on employers who regularly use temps, giving agency workers rights that are similar to those which apply to permanent employees.
Although agency workers are already entitled to a range of statutory protections (e.g. under the Working Time Regulations and the National Minimum Wage legislation etc), temporary agency workers (temps) have historically enjoyed less favourable statutory employment rights than employees. This has given employers considerable flexibility in managing their work force by enabling them to respond quickly to peaks and troughs in work flow or to provide extra resource for the duration of a particular project.
The AWR will give temps the right to equal treatment in terms of basic terms and conditions for the remainder of the assignment after 12 weeks’ continuous service in the same role.
Compliance with the AWR does not affect the agency worker’s employment status or indicate that an agency worker is an employee.
An employer that fails to comply with its obligations under the AWR may be liable for a compensation award made against it by an Employment Tribunal.
Who Will Be Affected by The AWR?
The AWR will affect:
Employment businesses involved in the supply of temporary agency workers;
Individuals (temps) who are supplied as agency workers by a temporary work agency and work temporarily for and under the direction and supervision of a hirer;
Hirers of agency workers i.e. employers which hire temporary agency workers through an agency.
Those who are likely to be outside the scope of the AWR include:
Individuals who find work through a temporary work agency but are in business on their own account;
Individuals, such as cleaners, working on Managed Service Contracts, where the worker does not work under the direction and supervision of the host organisation;
Individuals working for in-house temporary staffing banks;
Individuals who find direct or permanent employment with an employer through an employment agency;
Individuals on secondment or loan from one business to another;
Individuals who find employment with an employer through an employment agency: once a worker is placed with a permanent employer, they have no further contractual relationship with the agency.
What New Agency Workers’ Rights Apply Under The AWR?
The AWR will give agency workers rights relating to collective facilities and amenities which will apply from the first day of an assignment and, after a 12-week qualifying period with the same hirer in the same role, the right to the same basic terms and conditions of employment as if they had been employed directly by the hirer. These entitlements are set out in more detail below.
Entitlements which apply from day 1 of an assignment are:
The right for all agency workers to be treated no less favourably than a comparable worker or employee in relation to access to collective facilities and amenities as provided by the hirer, unless this can be justified on objective grounds. This applies to those collective facilities provided by the hirer, such as a staff canteen or other similar facilities, transport services (e.g. local pick up and drop offs and transport between sites, but not company car allowances or season ticket loans), toilets and shower facilities, staff common room, waiting room, crèche, mother and baby room, prayer room and car parking.
The right for all agency workers to be provided with information about any relevant job vacancies within the hirer which would be available to a current comparable directly employed employee or worker. Please note that, if the hirer is carrying out an internal reorganisation, which may involve a headcount freeze, it is acceptable to specify that any vacancies arising out of the restructure are only available to direct employees.
Entitlements which apply after a 12-week qualifying period in the same job role with the same hirer are:
The right to equal treatment for all agency workers in relation to basic working and employment conditions. The ‘relevant terms and conditions’ are:
Pay – this means: any sums payable to the agency worker in connection with their employment, including basic pay; overtime payments; shift allowances; bonuses (but not discretionary bonuses which reward loyalty or long service); commission attributable to the amount or quality of work done by the individual; holiday pay; and vouchers which have monetary value e.g. luncheon vouchers. However, see also section 4 below for circumstances where equal treatment provisions on pay do not apply
The duration of working time e.g. if working is limited to a maximum of 48 hours a week
Annual leave – if the hirer would have given a more generous contractual annual leave entitlement to the agency worker if they had been recruited directly to fill the same job, the agency worker should receive the same enhanced entitlement once the 12 week qualifying period has elapsed, including the right to time off for bank and public holidays.
This additional entitlement in excess of statutory minimum leave can be provided as a one-off payment in lieu at the end of the assignment, as part of the hourly/daily rate or it can be given as paid leave.
Paid time off for ante natal appointments.
In relation to pregnant agency workers, alternative sources of work must be found, paid at the same or higher rate than the original assignment, if she can no longer complete the duties of the original assignment for health and safety reasons. If alternative work cannot be found, then the pregnant agency worker will have the right to be paid by the temporary work agency for the remaining expected duration of the original assignment.
The requirement is to give the agency worker the same basic working and employment conditions as they would have ordinarily received if they had been directly recruited by the hirer to the same job.
Permanent Contracts Providing for Pay Between Assignments
There is an exemption from the equal treatment provisions on pay where a temporary work agency can offer an agency worker a permanent contract of employment and pay the agency worker between assignments i.e. during the periods after the end of the first assignment under that contract when they are available to work but are not working because there are no suitable available assignments. This means that, after 12 weeks in a given job, the agency worker will not be entitled to the same pay as if they had been recruited directly.
Even if this exemption applies, the agency worker can still benefit from the other provisions in the AWR, such as equal treatment in relation to the duration of working time, night work, rest periods and rest breaks and annual leave after 12 weeks (see section 3 above). Agency workers must still receive the day one entitlements as well.
How is the 12 Week Qualifying Period Calculated?
The 12-week qualifying period is triggered by the agency worker working in the same job role with the same hirer for 12 continuous calendar weeks. A calendar week comprises any period of seven days starting with the first day of the assignment. In the case of part time staff, calendar weeks will be accrued irrespective of how many hours the worker works on a weekly basis.
The AWR are not retrospective and therefore for those agency workers already on assignment when the AWR come into force, the 12-week qualifying period will only start to run from 1 October 2011.
An agency worker might also work for more than one hirer during a week, resulting in more than one qualifying period with different hirers running at any one time.
An agency worker does not have to accrue the 12-week qualifying service with the same temporary work agency: qualification for comparable terms and conditions is dependent on service as an agency worker with a particular hirer, not with a particular agency.
Because the working patterns of agency workers can be irregular, the AWR provide for circumstances in which breaks in the assignment of an agency worker do not prevent them from completing the qualifying period. These provisions can be explained by thinking of the qualifying period as a clock which runs from 0 to 12:
Sometimes, a gap between assignments will mean that the clock is reset to 0 and must start again. Most commonly, this would occur because an agency worker begins a new assignment with a new hirer.
In other circumstances e.g. if the break between assignments (or during an assignment) with the same hirer is less than six weeks and the role is not substantively different, a break may just ‘pause’ the clock, which will then continue to tick when the agency worker returns to work with the hirer.
In some limited circumstances (e.g. breaks due to maternity leave or paternity leave), the clock will continue to tick for the originally intended duration of the assignment even if the agency worker is not working on an assignment.
The list below shows the different ways in which gaps in assignments would be treated:
Type of Absence
Effect on 12 week qualifying period
Agency worker begins new assignment with new hirer
Agency worker remains with same hirer but is no longer in the same role
Break between assignments of 6 weeks or more
Pauses the clock
Shut downs e.g. workplace closure, school holidays
Pauses the clock
Pauses the clock
Sickness absence (medically certified)
Pauses the clock for up to 28 weeks
Pauses the clock for up to 28 weeks
Pregnancy and maternity-related absence, statutory maternity, paternity or adoption leave
Clock keeps ticking for intended or likely duration of assignment
Where a hirer has different workplaces, moving an agency worker from one workplace to another will not usually break continuity unless it is a substantively different role.
What Constitutes a Substantively Different Role?
As stated above, if there is a substantive change to a job role with the same hirer, the qualifying clock is reset to zero.
However, in order for there to be a substantive change to the job role, the work or duties that make up the whole or the main part of the role must be substantively different.
A combination of the following factors (not one factor on its own) can be taken into account in establishing if the work is substantively different:
Is the pay rate different?
Does the role entail different skills and competences?
Is the work in a different location?
Is there a different line manager?
Does the role require extra training?
Does the role require a specific qualification that was not needed before?
In order for the job to be counted as a ‘substantively different’ role and the qualifying clock reset to zero, the hirer must notify the temporary work agency that the new job is substantively different and provide details of the job requirements. The temporary work agency must provide a description of the new role in writing to the agency worker. The agency should notify the agency worker that their role has substantively changed and that the 12-week qualifying period will therefore start again.
The Anti-Avoidance Provisions
A hirer is legally entitled under the AWR to decide not to engage agency workers beyond the 12 week qualifying period and there is nothing in the AWR to prevent assignments of 11 weeks being the hirer’s usual practice.
However, the AWR include anti-avoidance provisions to deal with any situation where a pattern of assignments emerge that are designed to deliberately deprive an agency worker of their entitlements. In the event of a claim, it would be up to an Employment Tribunal to decide whether the pattern of assignments indicated an intention to deprive the agency worker of their rights. If a Tribunal decided that there was such an intention, an additional compensatory award of up to £5,000 could be made against the hirer or temporary work agency or split between the parties. This would be on top of any compensation awarded to the agency worker for breach of the equal treatment provisions. Similarly, agency workers cannot contract out of the AWR.
As at present, for each vacancy a temporary work agency receives from a hirer, the agency must record the details about the vacancy required by the Conduct of Employment Agencies and Employment Businesses Regulations 2003, before they introduce or supply an agency worker to that hirer.
Additionally, a hirer will need to provide the temporary work agency with the following details in order to comply with the AWR, if and when an agency worker completes 12 weeks in a given job:
The level of basic pay (based on the annual salary an agency worker should have received if recruited directly by the hirer);
If and when there are overtime payments and shift/unsocial hours allowances;
Types of bonus schemes in operation (and means by which individual performance is appraised);
Whether or not the hirer offers vouchers which have monetary value; and
Annual leave entitlement
Agency workers are entitled to information relating to their equal treatment entitlements. This process depends on what aspect of equal treatment they are requesting information on:
In respect of day one entitlements, the requirement to provide information lies with the hirer and information can be requested any time after the start of the assignment;
For entitlements after the 12 week qualifying period, the requirement to provide information lies primarily with the temporary work agency and the agency worker can only request information after the 12 weeks have elapsed.
In relation to day one entitlements, the agency worker can make a written request for information to the hirer. The hirer then has 28 days to respond in writing from receipt of the request and must provide a written statement with all relevant information relating to the rights of a comparable worker or employee and reasons for the treatment of the agency worker.
If the request concerns basic working and employment rights applicable after 12 weeks in a given job, the agency worker cannot request information until the 12 weeks have elapsed. In this case, the agency worker can make a written request for a written statement from the temporary work agency about any aspect of equal treatment they do not believe they are receiving. The agency then has 28 days to respond in writing from receipt of the request, setting out:
Relevant information relating to basic working and employment conditions e.g. rate of pay, number of weeks of annual leave, etc.
Any relevant information or factors that were considered when determining the basic working and employment conditions e.g. if there is a pay scale, where the agency worker is put on the pay scale.
Where the equal treatment is based on a comparable employee doing the same or similar work, the terms and conditions applicable to that employee and explaining any differences in treatment e.g. lower rate of pay based on qualifications, skills and qualifications.
If an agency worker has not received a written statement about basic working and employment conditions within 30 days of making the request, they can then write to the hirer requesting the same information. Again, the hirer then has 28 days to respond in writing.
If an agency worker is not satisfied with the response or does not receive a response, they can bring a claim to an Employment Tribunal in relation to their rights under the AWR.
As far as day one entitlements (collective facilities and job vacancies) are concerned, liability rests solely with the hirer and the temporary work agency will not be held liable because they do not have a role in delivering these entitlements.
As regards basic working and employment conditions, liability can rest with the temporary work agency and/or the hirer. The agency will initially be responsible for breach of the equal treatment principle. However, it will have a defence if it can show that it took ‘reasonable steps’ to obtain relevant information from the hirer about its basic working and employment conditions, where it received such information it acted reasonably in determining what the agency worker’s conditions should be at the end of the qualifying period and where it had responsibility for applying those basic working and employment conditions to the agency worker, it had ensured that the agency worker had been treated accordingly. If the agency has taken all these steps, then liability is likely to rest with the hirer.
In terms of financial compensation, a Tribunal will make an assessment of the agency worker’s loss and calculate what it concludes is just and equitable compensation for that loss, such as loss of earnings related to their entitlements under the AWR. There is a minimum award of two weeks’ pay for equal treatment claims regardless of the value of the loss, unless the tribunal finds that the agency worker behaved unreasonably and then it has the discretion to reduce the award if it is just and equitable.
Information and Consultation
After 1 October, the AWR will require hirers to provide written information about temps to employee representatives during collective redundancies, transfers of undertakings (TUPE) and other statutory consultation, like the Information and Consultation of Employees Regulations. Specifically, hirers are required to provide details of the total number of agency workers working temporarily for the hirer, the areas of the business in which they are working and the type of work they are doing. Failure to provide this information could result in financial penalties for hirers for failing to comply with their information and consultation obligations.