Agency Workers Regulations

Spotlight on the Agency Workers Regulations

The prime minister, David Cameron, is reportedly investigating a way to water down the Agency Workers Regulations. I think it’s highly unlikely that the Government would decide to go head-to-head with the EU and simply refuse to introduce the new laws at this stage. What is a likely option is for the Government to agree on an early ‘one-year’ review of the Regulations.

Is your business prepared for the changes?

Who is responsible for compliance?

The recruitment agency should assume a lot of the responsibility but employers that use agency workers do have obligations under the Regulations. For instance, you will need to provide the agency with details about your employees’ terms and conditions of employment. Where there is a breach either or both parties can be held liable and the tribunal will decide who it believes is responsible.

Are all terms and conditions covered by the Agency Workers Regulations?

Included
  • Basic pay
  • Annual leave
  • Rest breaks
  • Bonuses linked to performance
  • Access to job vacancies (from day one in the assignment)
  • Access to communal facilities (from day one in the assignment)
 
Not included
  • Genuinely self-employed workers
  • Bonuses for loyalty or long service
  • Occupational pensions or sick pay
  • Financial participation schemes

What happens if an agency worker moves to a new role in the same organisation?
If the role is similar then the agency worker will continue as if they had remained in the same role. If the work or duties that make up the majority of the new role are substantively different then it would be regarded as a different role and the 12 weeks would start again.

Our business uses some self-employed people, are they covered by the Agency Workers Regulations?
Self-employed workers will not be covered by the Regulations if the agency or hiring organisation is considered to be a “client or customer” of the self-employed person. If the individual, the hiring organisation and the agency intend for the worker to be considered self-employed and not covered by the Regulations, there will need to be clear evidence in a written contract and in practice to this effect.

If an agency worker is absent does the 12-week qualifying period be restart?
Some absences will have the effect of breaking service but certain absences such as sickness and holidays simply pause the clock.

Top Tips

  • Terms and Conditions of Employment

    Identify what terms and conditions will need to be given to agency workers who qualify. For example, you will need to consider what will be covered by “pay”. You may want to consider how benefits are currently structured as this may affect whether or not they are caught by the definition of “pay” under the regulations.

    Assess the potential cost of agency workers obtaining the right to “equal treatment” under the directive and the hassle factor of keeping an eye on when they qualify. How is your business going to build the necessary checks into your current systems?

  • Review Existing Agency Contracts

    Review existing agency contracts to identify what (if any) protections they afford and where there are gaps. You could ask: under what arrangements are current agency workers supplied to the business? Are the current arrangements caught by the regulations? Are the workers employed by the agency? If so, are they paid between assignments? What do their existing terms and conditions say? What would you be liable for?

    Consider whether you can terminate existing contracts and on what notice, and whether it is better to terminate and retender than to allow the current arrangements to continue. Bear in mind terminating contracts, even those with termination for convenience provisions, may trigger exit provisions or incur liability. You must ensure that this risk has been taken into consideration.

    Alternatively, renegotiate terms with current providers to take account of the Regulations. New structures may involve a cost or risk increase for the provider that they may seek to pass on. Without the protection of existing contractual arrangements, these negotiations will be subject to commercial and market forces.

    If appropriate, consider obtaining warranties from the agency confirming that the regulations do not apply to the agency workers and/or indemnities to cover the risk that “equal treatment” will apply. Ensure that any new contracts entered into address the Regulations and the provision of workers is structured appropriately.

  • Switch to Short Term or Zero Hours Contracts

    Subject to the anti-avoidance provisions contained in the Regulations, consider engaging agency workers in different ways, for example, direct hires on short-term contracts or zero hours contracts.

  • Review Facilities Your Offer To Permanent Staff

    Review whether there are any facilities that you offer to permanent staff that you will need to give agency workers access to from 1 October. Consider what arrangements you have in place to make sure agency workers are aware of vacancies for permanent employment within your organisation.

Agency Workers Regulations