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Agency Workers Regulations 2010 Update

September 2011
The Agency Workers Regulations 2010 (the Regulations) will come into force on 1 October 2011, and will have an impact upon businesses that make use of temporary agency workers. Simply-docs has created a succinct set of Guidance Notes for Employers: The Agency Workers Regulations 2010, which are ideal for helping businesses navigate their way round the Regulations. These Guidance Notes have been refined from the Department for Business Innovation & Skills (BIS) Guidance on The Agency Worker Regulations.

An agency worker is defined as:

• An individual who is supplied by a temporary work agency;
• An individual working temporarily under the direction and supervision of an employer (known as a ‘hirer’ )

In summary, the Regulations give agency workers:

• The right to access the collective facilities and amenities e.g. canteen, car parking, childcare facilities provided by the hirer and the right to information about vacancies with the hirer. These rights apply from day one of the assignment.
• Equality in respect of basic working and employment conditions e.g. pay, duration of working time, rest periods, annual leave. These rights apply after 12 weeks on assignment.

The purpose of the Regulations is to try to ensure fairer treatment of agency workers or ‘temps’. This does not mean, however, that agency workers have the same rights as employees. The agency worker will not be entitled to, for instance, make an unfair dismissal claim on termination of an assignment or have the right to statutory minimum notice of termination of an assignment.

In order to be entitled to the rights which accrue after a 12-week qualifying period, the agency worker must work in the same role with the same hirer for 12 continuous calendar weeks. The worker does not have to work in an assignment for a whole week; even if the worker only works for part of a week, this will count as part of completion of 12 continuous weeks. There are certain circumstances where the qualifying period may be suspended e.g. the agency worker going on jury service or a planned shut down of the workplace by the hirer e.g. at Christmas. Usually, the qualifying period will be broken after a break of at least 6 weeks between assignments with the same hirer.

The Guidance Notes for Employers: The Agency Workers Regulations 2010 set out how the 12-week qualifying period is calculated. The Regulations include rigorous anti-avoidance provisions which are designed to prevent hirers from structuring assignments to avoid agency workers accruing the 12-week qualifying period. So, when an agency worker has:

• completed two or more assignments with a hirer; or
• completed at least one assignment with a hirer and an earlier assignment with another client connected with that hirer; or
• has worked in more than two roles with the hirer and on at least two occasions has worked in a role that was not the ‘same role’ as the previous role; and
• the most likely explanation for the structure of the assignment is that the hirer is intending to prevent the worker from being entitled to the right to equal treatment under the Regulations,

the worker shall be treated as having completed the qualifying period and/or being entitled to equal treatment. If an employment tribunal finds that an anti-avoidance structure exists then an award of up to £500 can be made against the temporary work agency and/or the hirer.

Some 'umbrella' companies may use the Swedish Derogation Model (SDM). We advise that companies should take their own legal advice on the possible implications and problems of the SDM.

The SDM offers partial exemption from the Regulations by allowing both hirer and agency to avoid the need for equality of pay. Please note that this exemption is in respect of pay only, and does not apply to other rights, such as equality of working time, access to collective facilities or vacancy information. Under the SDM, the agency has a permanent contract of employment with the agency worker. This contract must be in writing and include terms and conditions in relation to pay rates, location of the initial contract, the type of work involved and the expected hours of work. The contract has to be entered into before the start of the first assignment. Between assignments, the agency must pay the agency worker a minimum amount which is at least 50% of their basic pay whilst on assignment (and must not be less than the National Minimum Wage).

Under the Regulations, there will also be a requirement for employers to give specific information during collective redundancy, TUPE (transfers of undertakings) transfers and some other statutory consultations, such as under the Information and Consultation of Employees Regulations. When providing written information to worker representatives for consultation purposes, hirers must give information on the use of agency workers, including:

• the total number of agency workers engaged to work temporarily for the employer,
• the areas of the employer’s business in which they are working and
• the type of work they are contracted to undertake.

The guidance also covers liability issues for the temporary work agency and the hirer, who are both potentially liable to the agency worker for a minimum of two weeks’ equal pay if a tribunal finds that equal treatment has not been applied to the agency worker.

From 1 October, businesses (hirers) should:

• Ensure staff (and in particular line managers) are aware of the Regulations and know that they will need to provide accurate information on basic pay and working conditions to any agency through which temporary workers are supplied;
• Set up systems to disclose information to agencies on pay and holidays for comparator employees; and
• consider the average length of their temporary assignments currently so as to ensure awareness of the proportion of temporary workforce that is likely to acquire 12 week rights.

The Agency Worker Regulations are a new and complex legal area, which is changing all the time. We recommend that you take specialist legal advice.

Please note that the advice given on this website is guidance only and cannot be taken as an authoritative interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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