Agency Workers Regulations 2010: employers’ guide

As an employer, it will be important to understand the employment rules that apply to agency workers, compared to workers or employees who have been hired directly by you. The Agency Worker Regulations 2010 were introduced to remove discrimination facing agency workers in areas such as pay, holiday entitlement and working time conditions.

The following practical guide is to help those responsible for hiring agency workers to understand the basic provisions of the Agency Workers Regulations 2010, including their key obligations under the regulations and the changes due to come into force on 6 April 2020.

What do we mean by ‘agency workers’?

An agency worker is an individual who is provided by a temporary work agency to undertake work in a particular job for you as the hirer, under your direction and supervision, on a temporary basis.

The worker is not self-employed, but rather works under an employment contract with the temporary work agency, although as the hirer you will be responsible for managing the individual’s work and what they do on a day-to-day basis during the course of their assignment.

An agency worker initially has much lesser rights than those of an ordinary worker or employee. It is therefore important to ascertain the employment status of those that work for you. A person will not be classed as an agency worker and will, therefore, fall outside the scope of the regulations where:

• They have found work through a temporary work agency but they are in business on their account, ie; they are self-employed and working for you as their client or customer
• They are working on a managed service contract where they do not work under your direction and supervision, rather the agency supplies a service to you, such as cleaning or catering, and manages the worker
• They work for an in-house temporary staffing bank, where you employ temporary workers directly and they only work for you
• They are on secondment or loan to you from another business.

In particular, a person will not be classed as an agency worker in circumstances where they have found direct employment with you, either through an employment agency or by themselves. In these circumstances the employment status of that individual would be either that of an employee, depending on the terms of their contract with you, or a worker in the broader sense.

What are the Agency Workers Regulations 2010?

In general terms, the Agency Workers Regulations 2010 give agency workers the entitlement to the same basic employment and working conditions as if they had been recruited directly by the person or organisation hiring them, if and when they complete a qualifying period of 12 weeks in a particular job.

The underlying principle behind the regulations is for agency workers not to be disadvantaged by virtue of them being supplied by a temporary work agency, as opposed to if they had been recruited by the hirer directly. As such, businesses cannot treat agency workers less favourably than their permanent staff after 12 weeks in the same job in respect of pay and other rights.

From day one, agency workers are also entitled to access information in relation to employment vacancies within the hirer’s business, as well as the right to access the collective facilities provided by the employer such as canteens, staff rooms, toilet or shower facilities, any workplace crèche and car parking.

What are the basic rights of an agency worker after 12 weeks?

Under the Agency Workers Regulations 2010, after the 12-week qualifying period has elapsed, the agency worker will be entitled to the same basic employment and working conditions as a comparable worker or employee.

Equal treatment is not required in respect of all the terms and conditions that the worker would have received had they been recruited directly. However, in broad terms, it covers key elements of pay, rest breaks, annual leave and duration of working time, although this list is not exhaustive.

In particular, pregnant agency workers who have completed the 12 week qualifying period, will be entitled to take paid time off to attend antenatal medical appointments and antenatal classes when on assignment.

Deciding what “equal treatment” means will usually be a matter of common sense, where the requirement is simply to treat the worker as if they had been recruited directly to the same job, ie; what the agency worker would be entitled to, given a particular role and their particular skills and qualifications.

Key elements of pay

In relation to the right to equal pay, in addition to their existing right to be paid the national minimum wage, a qualifying agency worker will be entitled to the same basic pay as any comparable worker, in addition to overtime and shift allowances, pay for annual leave, as well as certain types of bonus and commission payments.

There are several different types of bonus or commission payments. However, the key question is whether the payment is directly attributable to the amount and quality of work done by the agency worker. If it is for another reason, such as to encourage the worker’s loyalty or to reward long-term, then it will fall outside the scope of the entitlement to the same pay.

Working time and holiday entitlements

In relation to working time and holiday entitlements, a qualifying agency worker will be entitled to the same terms and conditions relating to rest breaks, annual leave and the duration of working time as a direct worker.

In relation to rest breaks and annual leave, all workers have a statutory entitlement to 20 minutes rest during a shift of more than 6 hours, as well as to 5.6 weeks holiday per year. However, where someone directly recruited would have had a more generous contractual entitlement than the statutory minimum requirement, perhaps a lunch hour rather than just 20 minutes, a qualifying agency worker working the same shift will also be entitled to this.

In respect of duration of working time, this can cover various scenarios but typically relates to a situation where, if an individual is hired directly for the same role and would not be expected to work more than a certain number of hours per week, then the same terms should be offered to the agency worker.

Further, in the recent decision of Kocur v Angard Staffing Solutions Limited and another [2019], the Court of Appeal confirmed that the reference within the regulations to “duration of working time” was intended to mean the maximum length for any period of working time, whereby there is no obligation to offer agency workers the same amount of working hours as a comparable employee.

How does the 12-week qualifying period work?

The agency worker will be entitled to equal treatment having undertaken the same assignment for a period of 12 weeks, regardless of whether they have been supplied by more than one temporary work agency over the course of that period, and no matter how many hours they have worked on a weekly basis.

The 12-week qualifying period is triggered by working in the same job with the same hirer for 12 calendar weeks, whereby a calendar week will comprise any period of 7 days starting with the first day of an assignment. By way of example, where an agency worker begins work for you mid-week, all work done up to and including the following Monday will count as one calendar week.

Although the qualifying period can be broken where there is a gap between assignments, or even a move to a new assignment, in some cases a break will merely pause the clock that will then continue to tick when the agency worker returns. In other cases the clock will continue to tick even during the break.

The types of break that will pause the 12-week qualifying clock include:

• A break for any reason where this is no more than 6 calendar weeks and the agency worker returns to the same role with the same hirer
• A break of up to 28 weeks where the agency worker is incapable of work due to sickness or injury
• Any break where the agency worker is taking leave to which they are entitled, including annual leave
• A break up to 28 calendar weeks where the agency worker is required to perform jury service
• A break due to a regular, planned shutdown of the workplace by the hirer, for example, at Christmas
• A break due to strike, lock out or industrial action at the hirer’s workplace

The clock will continue to tick for breaks due to pregnancy, childbirth or maternity up to 26 weeks after childbirth, or any breaks where the agency worker is taking maternity, adoption or paternity leave to which they are entitled. However, the clock will only continue to tick for the originally intended duration of the assignment, or the likely duration of the assignment, whichever is longer.

Typically, the reasons for the qualifying clock to reset to zero include:

• Where an agency worker begins a new assignment with a new hirer
• Where an agency worker remains with the same hirer but is no longer in the same role, although the new role must be substantially different
• Where there is a break between assignments with the same hirer of more than 6 calendar weeks

What are the consequences of breaching the regulations?

Where an agency worker is of the view that they are not receiving the same treatment as a comparable worker under the Agency Workers Regulations 2010, they will be able to enforce their rights in the employment tribunal. Further, both the temporary work agency and the hirer can be liable, in whole or part, for any lack of equal treatment.

However, where the temporary work agency would be initially responsible for the breach of the equal treatment principle, it will have a defence if it can show that it took reasonable steps to obtain relevant information from the hirer about its basic working and employment conditions and treated the agency worker accordingly. In these circumstances, the hirer will become solely liable for any breach of the regulations to the extent that it failed to provide the necessary information to the temporary work agency, or provided incorrect information.

Accordingly, you must ensure that you provide the temporary work agency with up-to-date and accurate information on your terms and conditions so that they can ensure that an agency worker receives the correct equal treatment, as if they had been recruited directly, after 12 weeks in the same job.

It is also worth noting that any attempt to deliberately deprive an agency worker of their entitlements can result in an award of up to £5,000 being made against you. In particular, the regulations incorporate anti-avoidance provisions that prevent a series of assignments being structured so as to prevent an agency worker from completing the 12-week qualifying period.

What are the Agency Workers (Amendment) Regulations 2019?

In December 2018, in response to an independent review of modern working practices undertaken by a panel of industry experts, the Government published a number of employment law reforms that it plans to introduce as part of the Good Work Plan. The overall aim of the plan is to strengthen employment rights and improve working lives within the UK, including the rights of agency workers through a commitment to fair and decent work.

As such, under the Agency Workers (Amendment) Regulations 2019 due to come into force on 6 April 2020, there will no longer be an exemption from equal treatment provisions on pay allowing a temporary work agency to offer an agency worker a permanent contract of employment and pay them between assignments, albeit on a lesser rate.

In other words, the removal of the opt-out provision after 12 weeks for agency workers to get a guaranteed level of pay in exchange for the same level of pay as a permanent worker, will ensure all agency workers are entitled to equal pay, whether or not they are paid between assignments.

These new statutory provisions will effectively repeal what is known as the “Swedish derogation”, where agency workers were not being given the choice of their type of contract but rather being forced to accept a derogation contract or receiving no work whatsoever.

Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.