The Agency Workers Regulations - Are you ready?

Updated September 2011

In October 2011 new regulations come into force giving agency workers certain new rights so that they experience a similar level of treatment to non-agency employees. Those in the housing sector who are hiring, as well as the agencies who are employing workers for the housing sector, will be responsible for ensuring the regulations are adhered to because non-compliance can lead to agency workers bringing a claim against both the agency and the hiring organisation. Both agencies and hirers should be aware that there is a wide discretion to award compensation to cover the loss suffered.

The regulations apply to agency workers who are supplied by a temporary work agency to work on a temporary basis for the hirer and who have a contract of employment with the agency or a contract to perform work or services personally for the agency. However, they do not apply to self-employed contractors.

Day One rights

From 1 October 2011 agency workers in the housing sector should be afforded access to collective facilities and amenities that are available to comparable permanent employees. This includes canteen facilities, childcare facilities, transport services, and the use of crèche and parking facilities. The agency worker should also be given access to details of job vacancies with the hirer. Liability for any failure to provide these rights will lie with the hirer.

Week 12 rights

If an agency worker has completed a 12 week qualifying period they will be entitled to the same basic working and employment conditions as if they had been employed directly. This includes salary, overtime shift allowance, rest breaks, holiday entitlement and paid time-off for antenatal appointments.

Agency workers will also have a right to bonuses linked to individual performance; however, they will not be entitled to a bonus based on overall company performance.

Agency workers will also not be entitled to contractual sick pay, pension, redundancy pay, notice pay, most benefits in kind, and certain other benefits.

In order to ascertain what rights are available to them, agency workers will be able to compare themselves with an employee at the hirer’s business who is doing the same, or broadly similar work. Where there is no comparator based at the same site as the agency worker, they may be able to rely on a worker doing the same or similar work at another site.

Liability for ‘week 12’ rights lies primarily with the employment agency. However, the agency worker can make a claim against both the hirer and the employment agency, particularly where there is uncertainty as to whether the hirer has provided the necessary information about pay and conditions to the agency.

The regulations include complicated provisions for working out at what point an agency worker satisfies the 12 week qualifying requirement. Continuity for the 12 week qualifying period is broken by a gap of six calendar weeks or more between assignments with the same hirer, or by a change in job to a new role that is substantially different from the previous role. Sham arrangements which prevent the agency worker from obtaining the 12 week qualifying period can attract a £5,000 fine.

Who falls outside the scope of the regulations?

There are individuals that aren’t covered by the regulations. Those working on managed service contracts where the worker does not work under the direction and supervision of the hirer; individuals working for an in-house temporary staffing bank; as well as individuals who find direct employment in the housing industry through an employment agency are all exempt.

Action points

In preparation for implementation of the regulations, hirers in the housing sector should:

• Assess the categories of temporary staff they currently engage and determine whether they qualify as agency workers under the regulations.
• Evaluate whether it is necessary to engage agency workers for periods of 12 weeks or more. Where workers are engaged for short intermittent assignments, assess whether any workers will nevertheless qualify for ‘week 12’ rights because of the provisions in the regulations which allow workers to build up to 12 weeks if they are employed after less than a six week gap.
• Calculate the potential financial exposure of agencies who currently supply workers (and therefore the likely on-costs for the hirer). Is the pay that agency workers currently receive in respect of their roles more or less than that of a comparable employee in the hirer’s business?
• Both agencies and hirers should look out for the other party inserting new indemnities in their commercial agreements, placing the onus on the other to be responsible for any breach of the regulations.

In any event it is in the best interest of both hirers and agencies to communicate effectively and to share information to ensure compliance with the regulations when they come into force. For example, if hirers make sure agencies are provided with up-to-date terms and conditions of employment, the agency can ensure that its workers receive equal treatment. Ultimately, it is through open and effective communication that both parties can ensure compliance and avoid having to pay compensation.

This article originally appeared in Inside Housing.

It is intended for general guidance and represents our understanding of the relevant law and practice as at September 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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