Changes afoot when using agency workers

Using agency workers to fill staffing gaps is often thought of as a quick and easy fix. But, according to Hannah Saunders, new regulations will alter the way that agencies can supply temporary workers and the obligations for businesses that hire them.

The Agency Workers Regulations 2010 come into force in October this year. Designed to protect temporary agency workers, they have serious implications for employers.

The headline changes include the following:

Rights from ‘day one’

Agency workers will gain some rights on day one of their assignment, for example access to staff facilities such as a canteen or childcare facilities. They must also have access to information on job vacancies with the hiring business from day one.

Equal treatment rights

Agency workers will be entitled to equal treatment rights after a 12-week qualifying period, as if they had been employed directly by the hiring business. The right to equal treatment applies only to certain terms and conditions of employment, like pay (including basic pay, holiday pay and overtime), rest periods and annual leave. It does not apply to other terms, such as occupational pensions, redundancy pay and occupational sick pay.

In most cases, equal treatment can be established by giving the same relevant entitlements as if the worker had been recruited as an employee to the same job. It is not always necessary to identify a comparator.

12 week qualifying period

The 12 week qualifying period restarts if an agency worker:

• starts a new assignment for a different client;
• has at least a six-week break with the same client; or
• starts a substantially different role for the same client.

However, beware as there are anti-avoidance provisions which prevent businesses adopting a "12 week on, 6 week off" pattern over and over again with the same agency worker, even where they are supplied by different agencies.

Liability for breaches

The hiring business is liable for any breach of day one rights.

The agency is liable for a breach of equal treatment rights to the extent that it was responsible for the breach.

Hirers can be liable for a breach of equal treatment rights if they fail to provide the agency with accurate information about their terms and conditions.

Exclusions

Not all agency workers are protected. For example those who are in business on their own account are excluded even where they find work through a temporary work agency.

Reducing the impact

If you regularly engage agency staff, there are various precautions that you can take to reduce the impact of the regulations:

• The equal treatment provisions on pay do not apply to agency workers who have a permanent contract of employment with the agency and are paid between assignments at a rate specified in the regulations. You could ask your agency whether they are prepared to do this.
• Limit the assignments of agency workers to less than 12 weeks, taking care not to fall foul of the anti-avoidance measures by using the same agency worker on successive occasions.
• Consider alternatives to agency workers, including self-employed contractors, fixed-term employees, or contracting out functions performed by agency staff. However, you will need to be mindful of the possibility of the TUPE legislation applying to an outsourcing.

Next steps

We recommend that you conduct an urgent assessment of your agency worker arrangements and discuss them with the agencies to establish how the issue will be dealt with.

You may also need to amend company policies and we would be delighted to advise you about this.