UK: Agency Workers Regulations 2010: Finalised Guidance Published

The Agency Workers Regulations 2010, which come into force on 1 October 2011, mark a sea change in the position of agency workers in the UK. The finalised Guidance on these Regulations, published today, set out the way the Government expects the Regulations to work in practice. Any business that supplies or uses agency workers will need to be aware of the changes and take steps now to prepare for these.

Who is affected?

The Regulations essentially apply where:

• there is a contract between a worker and an agency;
• the worker is temporarily supplied to a hirer by the agency; and
• when working on assignment the worker is subject to the supervision and direction of that hirer.

They will therefore generally not apply where:

• the individual is in a business on their own account providing services to the hirer;
• the individual is introduced by an agency to a hirer but is not engaged through the agency, instead they are directly employed by the hirer;
• there is a managed services contract where the workers are not under the supervision of the hirer – they remain supervised by the agency; or
• a worker is seconded from one business to another for a period.

What rights do they give?

Day one rights:

From "day-one" of an assignment, all agency staff will be entitled to:

• access the collective facilities and amenities provided to employees of the hirer (for example, the staff canteen, crèche, car parking facilities etc); and
• access to information relating to vacancies within the hirer.

The Guidance is clear that the right will not be to enhanced benefits above those of permanent employees of the hirer. For example, the right to be provided with information concerning vacancies is to notify of vacancies that would normally be published internally in the hirer. The right to access car parking spaces would be to be put on a waiting list, if there was a waiting list, in the same way as any permanent employee.

Week 12 rights:

After an agency worker has been on an assignment on the same job with the same hirer for 12 calendar weeks (where there has not been a break of more than six weeks), the worker will be entitled to further rights of equal treatment. These are to the same basic working and employment conditions as any employees of the hirer, including those relating to:

• key elements of pay (eg. salary, performance related bonus, commission, holiday);
• annual leave; and
• the duration of working time.

The Guidance contains clear examples of what conditions are and are not included.

Can you get out of it?

An agency worker cannot opt out of the Regulations and there are specific anti avoidance provisions built in to catch any schemes that hirers and agencies may use to avoid the application of the Regulations. The types of situations that will be caught are:

• where a worker's role is changed towards the end of the 12 weeks to avoid being caught by the Regulations;
• where a worker is moved between legal entities in the hirer's Group, to restart the 12-week period; or
• where the worker's assignment is ended before the 12-week period and then the same assignment begins again six weeks later.

If there is a deliberate and regular pattern of behaviour that has lasted for more than two assignments, this may fall under the antiavoidance provisions and the agency and/or hirer could be held liable for this, incurring a penalty of up to £5,000 as well as the worker being deemed to have attained the 12-week qualifying period.

One way built into the Regulations for the agency and hirer to avoid the worker acquiring 12-week rights is for the agency to enter into a "Swedish" non-derogation employment contract with the individual before they start their first assignment. This contract gives the individual the right to be paid (at a reduced rate) during any period they are not on assignment. These contracts are only likely to be appealing where an agency can be sure that assignments will be available, or they are keen to retain the business of a particular hirer who uses agency staff.

What should you be doing now as a hirer?

Consider what current agency staff are engaged by you:

• Are these workers currently being paid more/less than your current staff?
• What benefits are they given access to at your premises?
• Do you currently reward agency workers for not receiving benefits by giving them a higher salary? If so, this will need to be reviewed.

Update your records so that it is clear:

• where you use agency staff;
• how long their assignments have been for; and
• how their benefits/treatment compares to permanent members of staff.

Decide how you are going to use agency staff going forward:

• Do you have agency staff on your books on long-term rolling assignments?
• How will these be managed?
• Is it possible to streamline your use of agencies so that you only take workers from one agency?
• Do you want to reduce the length of assignments, to avoid any issues with pregnant agency staff/sickness etc?
• With this in mind, are there agency staff that you want to get out of your business before 1 October 2011?

Consider whether groups of agency staff would be better employed through a managed services contract:

• Are these roles that can be managed and supervised by an outside agency?
• Is it worth putting an in-house bank of casual staff in place instead of using agencies?

If you are concerned about managing the use of agency workers and giving effect to the 12-week rights, consider whether it is worth discussing the use of "Swedish" non-derogation contracts with the agencies you use:

• Are they putting these in place with their workers?
• Commercially, is this a good alternative for you?

Do you pay performance bonuses to permanent members of staff based on an appraisal system?

• Consider how/if you will apply this appraisal system to agency workers on assignment for more than 12 weeks.
• How will you calculate the value of any bonus payable to them?
• Do you want to restructure your bonus system?

The finalised guidance is available at: http://www.bis.gov.uk/assets/biscore/employment-matters/docs/a/11-905-agencyworkers- regulations-guidance.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.