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How will the Agency Workers Regulations 2010 affect my business?

16th September 2011

A number of changes are coming into force on 1 October 2011 when the Agency Workers Regulations 2010 are implemented. The regulations are intended to offer better treatment to agency workers.

The changes

A business which recruits agency workers (the hirer) from a temporary work agency (the agency) must ensure that the temporary workers (the temps) are treated equally with permanent employees in certain circumstances. In the event the regulations are not complied with the temps may seek compensation from the hirer and agency in the Employment Tribunal.

Under the new regulations, on the first day at work with the hirer the temps should be provided with access to any collective facilities and amenities which are provided to permanent staff. Examples include; car park, canteen and crèche. However, if permanent employees receive benefits off-site such as reduced gym membership, this does not have to be replicated for the temp.

The hirer must also ensure that any temp has access to relevant job vacancies which may become available. This does not mean that the temp should be given preferential treatment in relation to any vacancy, but he/she should at least be given the opportunity to apply for that job.

Equal basic working and employment conditions after 12 weeks

Under the new regulations the temp will, after a 12 week qualifying period, be entitled to equal “basic working and employment conditions” in line with permanent members of staff. ‘Basic conditions’ are restricted to pay, working time, night work, rest periods, rest breaks and annual leave.

According to the guidance published in support of the regulations, “pay” includes basic pay such as hourly wage, overtime pay, bonus or commission payments for individual performance, annual leave for the statutory minimum period, payments for unsocial hours or hazardous work and vouchers of fixed monetary value (for example lunch vouchers where they are not provided by way of salary sacrifice). However, the obligation to match these entitlements for temps will only apply if these terms would ordinarily be included in the contract had the person been recruited permanently.

It is worth noting that “pay” does not include company sick pay, redundancy, occupational pensions, occupational maternity and paternity pay, notice pay, expenses, benefits in kind and bonuses not linked to individual performance. Therefore there is no need for the hirer to provide equal entitlement to temps on these issues.

The qualifying period of 12 continuous calendar weeks’ service by the temp must be in the same role for the same business. There are a number of situations which stop the 12 week clock running which include; the temp moves to a substantively different role with the hirer’s business or there is a break of more than six weeks between assignments. Also the clock can be paused by sickness absence or annual leave.

There are anti-avoidance provisions in place to prevent businesses moving workers to marginally different roles before the twelve week period expires.

What should hirers and agencies do to prepare for 1 October 2011?

Hirers should ensure that all existing temps engaged with them on 1 October 2011 have access to collective facilities and job vacancies from this date. Access to collective facilities is the responsibility of the hirer and not the agency.

Where temps are to be taken on for longer than 12 weeks, hirers should simply ensure that they provide agencies with copies of their standard terms and conditions of employment, pay scales and annual leave entitlements for comparable permanent workers. They should also establish a mechanism for keeping track of temps so that the qualifying period can be calculated accurately.

After 12 weeks the temp must receive the same basic pay as a comparable permanent employee. This is the responsibility of both the hirer and the agency. The agency will have initial responsibility and therefore will be obliged to obtain the relevant information from the hirer as to entitlements of comparable permanent employees.

Comment

Hirers may consider engaging temps on short term assignments of no more than 12 weeks. However, if replacing temps with different agency workers is unattractive due to costs of induction and lack of continuity, hirers should ensure basic working conditions and employment conditions match those of permanent employees.

Where the hirer proactively shares the relevant information about its permanent staff with the agency at the outset, in the round, it should be relatively straightforward for the hirer and agency to ensure compliance with the new regulations.

Roger Spence
Partner
Harrison Drury & Co Limited

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