As an employer, it’s important to understand the rules that apply to agency workers to ensure you don’t end up with a costly employment tribunal claim. The Agency Workers Regulations 2010 came into force on the 1 October 2011 and were introduced to protect agency workers from being disadvantaged, providing the right to equal treatment for basic working and employment conditions.
In this guide, we’ll give you an overview of the regulations as well as a summary of the key steps an employer should take to remain compliant.
We will cover the following:
- The definition of an ‘agency worker’ under the Agency Workers Regulations
- Overview of the Agency Workers Regulations 2010
- What rights do agency workers have from day one?
- What rights do agency workers have after 12 weeks?
- The 12-week qualifying period explained
- Information requests
- What are the Agency Workers (Amendment) Regulations 2019?
- How can an employer remain compliant?
- What are the consequences of non-compliance with the Agency Workers Regulations?
- How can Fitzgerald help?
The definition of an ‘agency worker’ under the Agency Workers Regulations?
According to the Agency Workers Regulations 2010, an agency worker is ‘an individual supplied by a temporary work agency to work temporarily under the supervision and direction of a hirer’. They are part of a tripartite agreement, whereby they are employed and paid by the temporary work agency, but work on a temporary assignment for the hirer. They are often known as temps.
The following workers do not meet the definition of an ‘agency worker’:
- Self-employed workers, i.e. a business to business relationship;
- Individuals working on managed service contracts, such as cleaning or IT services;
- Temporary workers employed by the company directly, such as zero hours workers and in-house bank staff etc; and
- Individuals who find direct employment with an employer through an employment agency.
Overview of the Agency Workers Regulations 2010
As per the Agency Workers Regulations 2010, agency workers are entitled to the same statutory entitlements as other workers, such as:
- to be paid the National Minimum Wage or Living Wage;
- a minimum of 5.6 weeks annual leave; and
- protection against discrimination under the Equality Act.
In addition, the Agency Workers Regulations 2010 provides agency workers with the right to equal treatment for basic working and employment conditions. The regulations state that agency workers should be treated no less favourably than a ‘comparable worker’, i.e. a worker who is directly engaged by the hirer and who is doing the same or broadly similar work to the agency worker. The regulations provide agency workers with two types of rights – day one rights and 12-week rights.
What rights do agency workers have from day one under the Agency Workers Regulations?
From day one of an assignment, agency workers are entitled to access information about employment vacancies with the hirer. Agency workers are also entitled to access shared facilities as if they were directly employed with the hirer. Facilities may include canteens, staff rooms, toilet and shower facilities, transport services (such as a shuttle bus), car parking, prayer room or onsite childcare facilities.
What rights do agency workers have after 12 weeks?
On completion of the 12-week qualifying period, agency workers have the right to the same basic terms and conditions of employment as if they had been directly employed by the hirer. This includes:
Pay
Qualifying agency workers are entitled to receive the same pay as the comparable worker. This includes: basic pay; overtime pay; shift allowances; annual pay rise; annual leave pay; and performance related bonuses/commission.
This doesn’t necessarily mean that the agency worker must be paid exactly the same as the comparable worker. However, there must be a fair and objective justification for any difference. For example, if the comparable worker is significantly more experienced than the agency worker then lower pay could be objectively justified.
The following types of pay are not covered by the regulations: company sick pay; company pension schemes; enhanced maternity, paternity and adoption pay; redundancy pay; notice pay; expenses; most benefits in kind; training allowances; rewards for long service; and any bonuses that are not directly related to individual performance or contribution (such as bonuses based on company performance).
Duration of working time, breaks and night work
Qualifying agency workers will be entitled to any working time conditions that the comparable worker is entitled to. This may include longer breaks, or restrictions on the total number of hours worked per week.
Annual leave
Qualifying agency workers are entitled to the same enhanced annual leave entitlements as the comparable worker. Agency workers may be given the option of receiving enhanced annual leave (but not statutory leave) as a lump sum payment or enhanced hourly rate.
Protection for pregnant women and new mothers under the Agency Workers Regulations
The Agency Workers Regulations 2010 provide additional protection for pregnant women and new mothers, with the aim of keeping them in the workforce. Qualifying pregnant agency workers are entitled to paid time off to attend antenatal appointments and classes. If they are unable to complete the duties of the assignment for health and safety reasons related to pregnancy, the temporary work agency must find them alternative work on the same or more favourable pay. If alternative work isn’t available, the agency worker has the right to be paid for the remaining duration of the original assignment.
The provisions of the Equality Act also apply to agency workers, with no qualifying period required. The Equality Act states that less favourable treatment on the grounds of pregnancy or maternity is discriminatory. This means that it is likely to be discrimination if a hirer refuses to accept a worker, or an agency refuses to place a worker, because they are pregnant.
For any benefits requiring a period of service (such as service leave), the period starts at the time the qualifying period commenced (i.e. the agency worker’s first day).
The 12-week qualifying period explained
The 12-week qualifying period under the Agency Workers Regulations will apply where the agency worker works in the same job with the same hirer for 12 calendar weeks. This applies regardless of whether they have been supplied by more than one temporary work agency during that time. Calendar weeks will be accrued regardless of how many hours the worker does on a weekly basis. Even if the agency worker only works a couple of hours a week, this will still count as a calendar week.
The qualifying period will continue to accrue if the agency worker takes a break due to pregnancy, childbirth, maternity leave, adoption leave or paternity leave. As the government states, ‘the clock will continue to tick for the originally intended duration of the assignment, or the likely duration of the assignment (whichever is longer)’.
The ‘qualifying clock’ will be paused if the agency worker has a break from working for the hirer and:
- The break is for no more than six calendar weeks;
- The break is for up to 28 weeks because the agency worker is incapacitated due to sickness or injury; or
- The break is for the purpose of taking leave to which the agency worker is entitled, such as annual leave.
The ‘qualifying clock’ will re-set to zero if:
- the agency worker starts a new role with the current hirer (see ‘Change of job role’ below);
- the agency worker starts working for a different hirer; or
- the agency worker stops working for the hirer for more than 6 weeks (unless one of the reasons listed above apply).
| Example Ben Ben has worked for the hirer in the same role for 10 weeks. Ben takes a break for 3 weeks. Ben returns to the hirer in the same role. Ben’s qualifying clock was paused at 10 weeks. As Ben has now returned to work for the hirer in the same role, the qualifying clock will continue running from where it left off. Ben will only need to work for two further calendar weeks before he reaches the qualifying period. |
Change of job role
If the agency worker changes job with the same hirer, the qualifying clock will re-set to zero. However, there has to be a substantive change, i.e. a ‘genuine and real difference to the role’. A change of line manager or a transfer to a different department into a broadly similar role would not be sufficient to re-set the clock. An employment tribunal will consider a range of different factors when assessing whether a new role will re-set the clock, such as:
- Are different skills and competences used?
- Has the pay rate changed?
- Is the work in a different location, department or cost centre?
- Has the line manager changed?
- Are the hours of work different?
- Are there different training or qualification requirements?
- Are different tools or equipment used?
Information requests under the Agency Worker Regulations
Under the Agency Workers Regulations 2010, agency workers have the right to make a written request for information relating to their equal treatment entitlements, as follows.
Day one entitlements
From day one of the assignment, the agency worker may request information regarding day one entitlements, i.e. access to facilities and job vacancy information. The hirer should respond within 28 days of the request for information, providing a written statement with all relevant information relating to the rights of a comparable worker and the reasons for the treatment of agency workers.
12-week entitlements
After 12 weeks, the agency worker may request information regarding their 12-week entitlements. The onus then falls on the temporary work agency to provide information within 28 days. The temporary work agency must provide a written statement which details the basic working and employment conditions of a comparable worker, as well as an explanation for any difference in treatment. If the temporary work agency does not provide a response within 30 days of the initial request, the agency worker has the right to request the same information from the hirer.
What are the Agency Workers (Amendment) Regulations 2019?
In 2018, the Government published the Good Work Plan which recommended a number of legislative changes to the Agency Workers Regulations 2010 aimed at providing greater protection for individuals and redressing the balance of power between the employer and worker. One of the key recommendations of the Good Work Plan was the abolition of the ‘Swedish derogation’ for agency workers.
The Swedish derogation allowed temporary work agencies to opt out of the equal pay provisions by engaging agency workers on a permanent contract and paying them between assignments. The Agency Workers (Amendment) Regulations 2019 removed this opt out provision, meaning all qualifying agency workers are entitled to equal treatment on pay regardless of whether they are paid between assignments.
Further information on the Good Work Plan is available in our guide.
How can an employer remain compliant with the Agency Workers Regulations?
Here are some tips for employers on how to remain compliant with the Agency Workers Regulations 2010.
Access to facilities
Provide agency workers with access to shared facilities from day one, including the kitchen, staff room and toilets.
Job vacancies
Share job vacancies with agency workers. This can be as simple as posting job adverts on a noticeboard in the staff room or on the intranet.
Pay and benefits of a comparable worker
Identify a comparable worker and provide accurate information on pay, benefits and working conditions to the temporary work agency. This will enable the temporary work agency to ensure the agency worker receives equal treatment.
Make sure you notify the temporary work agency if there are any changes to pay, benefits or working conditions. For example, information should be provided following an annual pay review.
Previous assignments
Ensure the temporary work agency is aware of any previous assignments the agency worker has completed.
Change of role
Notify the temporary work agency if the agency worker’s role changes, providing details of the new role.
Pregnant workers
Ensure pregnant agency workers are able to take paid time off to attend antenatal appointments. A workplace risk assessment should be completed for pregnant workers, and adjustments should be made to eliminate any safety risks. The temporary work agency should be notified if it is not possible for the agency worker to complete their assignment for health and safety reasons related to pregnancy.
Information requests
Respond to all information requests with a written statement within 28 days.
Collaboration
Work collaboratively with the temporary work agency to ensure the agency worker receives equal treatment.
Can’t I just terminate someone’s contract after 12 weeks and then re-hire them?
Many have hopefully asked the same question but the answer is no – measures have been put in place to prevent these tactics. Hirers are within their rights not to engage the temporary worker any further after 11 or 12 weeks. However, they can’t be seen to be creating a “pattern of assignments” with the deliberate intention of depriving a temporary worker of their employment rights and those caught doing so could be fined.
The BIS gives the following example:
“An agency worker completes two or more assignments with the same hirer, where they have already worked for 12 weeks with a 6-week break and then a further 12 weeks with another 6-week break. If the agency worker is then taken on for a third assignment, this could be considered an attempt to avoid the completion of the qualifying period but it would need to be clear that the attempt was deliberate.”
What are the consequences of non-compliance with the Agency Workers Regulations?
Agency workers can bring an Employment Tribunal claim in relation to their rights under the Agency Workers Regulations 2010, including the right to equal pay. Claims must be submitted within three months of the breach. Liability may rest with either the hirer or the temporary work agency, depending on the nature of the claim and whether each party was at fault. For example, the hirer may be solely liable if it failed to provide accurate pay information to the temporary work agency.
If the tribunal upholds the complaint, the agency worker will receive financial compensation. The minimum award is two weeks’ pay regardless of the value of the loss.
The Agency Workers Regulations contain an ‘anti-avoidance’ provision to prevent hirers and temporary work agencies from structuring assignments to circumvent the regulations. The Tribunal may make an award of up to £5,000 where it is found that the agency worker has been intentionally deprived of their equal treatment rights.
How can Fitzgerald help?
To help organisations navigate the Agency Workers Regulations, we’ve created a free checklist, available to download in PeopleStreams.
If you would like specific advice on managing agency workers, please contact our team on 0330 223 5253 or office@fitzgeraldhr.co.uk. We would be delighted to help you.
Further reading and helpful resources
We hope you found this article useful. You may also find the following resources helpful:
