Legal/Finance
New agency worker regulations – what should employers be doing?
14th July 2011
with Andrew Egan, of Charles Lucas & Marshall
New agency workers regulations are coming soon. Andrew Egan, an employment specialist with law firm Charles Lucas & Marshall, says that employers using agency staff need to assess their present arrangements and prepare for implementation in October.
Agency workers already make up about four per cent 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. Pay will include 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.
For further information contact Andrew Egan on (01635) 521212 or andrew.egan@clmlaw.co.uk
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