Agency Workers Regulations - FAQs

The new Agency Workers Regulations 2010 came into force on 1 October this year and are intended to give agency workers, with twelve weeks’ qualifying service, the right to the same basic terms and conditions as directly employed individuals.

We have received lots of questions from clients.  Here are some of the more common ones: -

• What amounts to ‘basic terms and conditions’ for the purposes of ensuring that agency workers and permanent employees enjoy equal treatment?

Agency workers are entitled to have access to employment vacancies and collective facilities, such as canteens, from ‘day 1’ of their assignment.  Once they have completed 12 weeks’ service, they will also be entitled to equivalent remuneration, paid holiday, working hours, overtime, maternity and anti-discrimination provisions to comparable employees.  Pension contributions are also likely to be caught by the Regulations.   If the comparable employee receives a contractual entitlement which is more generous than the statutory minimum, such as holiday, then it will be the more generous contractual entitlement that the agency worker must also receive.  If there are no comparable employees then the right to equal treatment cannot arise.

• Do comparable agency workers have to receive bonuses in the same way as directly employed staff in addition to normal pay levels? 

When the agency worker has completed the 12 week qualifying period, they are entitled to some of the comparable terms as if they had been directly recruited.  Basic pay, overtime and unsociable hours pay are all included.  Bonuses and commission are also potentially included if they relate to individual performance rather than company performance or long-term service bonuses.

• Do we have to make promotion opportunities available to agency workers in the same way as we would for employees? 

From 1 October 2011, all agency workers, regardless of the length of time they have been engaged (i.e. the 12 week qualifying period doesn’t apply), will be entitled to access the same facilities as direct employees and have access to information on vacancies.  Companies should ensure any agency worker can access their vacancy lists.  So, for example, if an agency worker does not have access to electronic systems such as an intranet or email, then the vacancy list could be pinned on a staff board or printed out and handed to agency workers.  If there are vacant roles, agency workers should receive information on the roles and how they can apply for them. 

• If we already have agency workers who have been with us for more than 12 weeks do they automatically qualify for the same level of pay under the Regulations from 1 October 2011? 

The 12 week qualifying period is not retrospective and agency workers will only start to accrue protection from 1 October 2011. 

• Is there any way of defending a claim of less favourable treatment of agency workers by comparison with permanent employees?

In relation to the ‘day 1’ right of access to facilities, less favourable treatment may be justified on objective grounds.  It is not yet clear what the tribunals are likely to accept as objective justifications, although cost itself is unlikely to be an acceptable reason.  There is no defence of objective justification for the other ‘day 1’ right of access to employment vacancies  or for rights relating to basic terms and conditions of employment after the 12 week qualifying period.

• Can you tell me about the circumstances in which the 12 week qualifying period will be broken so that the agency worker does not qualify for the protection under the Regulations?

If there is a break of more than six weeks between an agency worker’s assignments for the same business, or the agency worker starts a ‘substantively different’ role with the business after completion of an assignment, then the qualifying period will effectively stop at that point and the agency worker’s continuity will not continue to accrue.  There are other circumstances where continuity is not lost but is merely paused:  most notably, breaks of less than six weeks’ duration.

• Can we structure an agency worker’s assignments so they never reach the twelve week qualifying period?

The Regulations include anti-avoidance provisions, which carry fines up to £5,000.  If a Company is structuring assignments to attempt to avoid an agency worker’s rights, this could fall under the anti-avoidance provisions and lead to a fine.  However, it will be a question of fact for a Tribunal to consider.

• What should we do to get ready for the Regulations?

Businesses should carry out an audit of any agency workers currently working for them in order to determine their current rates of pay and other terms and conditions.  These should be compared with directly hired employees who are in comparable positions.

Also, the date at which the agency workers hit the qualifying period should be put in diaries.  A mechanism should be put in place so that the business knows when this trigger point has been reached for each agency worker.