Employment Law

New Agency Workers Regulations are coming soon. Andrew Egan, an employment specialist with Wantage law firm, Charles Lucas & Marshall says employers using agency staff need to assess their present arrangements and prepare for implementation in October.

Agency Workers Directive Seminar - 13th July 2011 - 9:30 - 11:30 a.m.

Agency workers already make up about 4% of the workforce in the UK. The new regulations are based on equalisation of pay and rights between agency workers and permanent workers. They aim to ensure that agency workers receive the right to the same basic working and employment conditions as those in the equivalent permanent job recruited directly by the end  user.

The regulations will apply to most workers who are provided by an agency to a hiring company. Even individuals provided through a personal services company, as individual contractors, may be caught by the regulations unless the hirer can persuade an employment tribunal that those contractors are genuinely self-employed.

Some rights will apply from the first day of employment, such as access to facilities such as childcare, canteens, transport and job vacancies. Other rights, such as pay and some benefits, will apply after the agency worker has been in the same job for 12 weeks, whether full time or part time.

Basic pay and terms will include pay rates, working time, night work, rest periods and breaks and contractual annual leave, overtime, luncheon vouchers and shift allowances. Pa’ will includes fees and some bonuses for individual performance.

The right to equal treatment will not, however, apply to occupational pension schemes, occupational sick pay, share schemes, contractual notice, contractual redundancy pay, contractual maternity or paternity rights, or to bonuses which relate to the hirer’s corporate performance, designed to reward loyalty or long-term service and which are not directly attributable to the amount or quality of the work performed.

The 12 week continuity will be broken if an agency worker starts a new assignment with a different client, has at least a minimum six-week break with the same client (either during or between assignments) or starts a new role with the same client which is substantially different from the previous role.

The hiring company will be solely responsible for any breaches which relate to the ‘day-one’ rights. The agency is responsible for setting the agency worker’s terms and conditions and will be liable for any breach of equal treatment rights.  The hiring company will need to identify what an equivalent permanent employee would be paid, and then pass that information to the agency, which will then set the level of the worker’s pay. The increased costs of equal treatment will probably have to be absorbed by the hiring company.

The impact of the regulations will vary across industries. Job sectors such as construction, education and healthcare likely to face some of the biggest challenges.

All users of agency workers should now be assessing their staff resources. However, there are measures an employer can take to mitigate or avoid the impact of the regulations:

Assess your arrangements with your agency – in what areas of the business  are the agency staff? How many are there? What roles are they carrying out? What are their duties and terms? How long are the agency assignments for?

Consider whether it is economically viable to hire staff via an agency in order to reduce the risk of workers being found to be employees. Consider whether to employ these workers direct. Consider inserting provisions in the contracts with agency workers to apportion liability that may flow from a breach of the regulations.

Liaise with your agency now to check what they are proposing to do. How will this impact on the agency’s rates and how will liability be contracted between the agency and your business?

Limit the use of agency workers for assignments of fewer than 12 weeks and/or in different roles – although there are anti-avoidance provisions in the regulations which deal with situations where a pattern of assignments emerges designed to deliberately deprive an agency worker of their entitlements. As a deterrent, tribunals will also have the power to make an additional award of £5,000 in respect of such claims. You would also need to look at the cost to the company of possibly having to regularly retrain agency staff to do the job

Certain services could be outsourced that are usually performed by agency workers, although additional risks and costs may arise as a result of the application of the TUPE Regulations.

You can contact Andrew Egan on 01635 521212 or andrew.egan@clmlaw.co.uk

Agency Workers Directive Seminar - 13th July 2011 - 9:30 - 11:30 a.m.

We are holding a free seminar in conjunction with Trak Employment Solutions Ltd in July, on the impact for businesses of the Agency Workers Regulations, coming into force on 1st October 2011.

Agency Workers Directive Seminar 13th July 2011 - Details

If you would like to attend, could you please contact Sarah Lardner by e-mail sarah.lardner@clmlaw.co.uk or by phone on 01635 521212 by Wednesday 6th July.

If you employ agency staff, temporary workers or contractors, this will be of interest to you.

Kind regards,