Agency Regulation Update 2011

The Regulations

In May 2008 the TUC and CBI agreed the grounds on which the 2008 EU Temporary Workers Directive will be implemented in England and Wales. The regulations will come into force in October 2011.

The intention of the directive and subsequent agreement is to give agency workers rights to use the ‘facilities of the hirer from day one and to the same pay and working conditions as the hiring organisations own employees after a 12 week period in any particular job. The entitlements are limited to aspects not deemed to be linked to the long term relationship between an employer and its employees.

Agency workers

Temporary workers contracted by an agency will fall within the scope of the regulations. Temporary workers employed via umbrella companies or limited companies who are deemed not to be in business on their own account will also qualify under the regulations. The intention of the regulations is to look through the often complex supply chain of agency provision and to protect temporary workers supplied via third parties and master vendor arrangements.

Those specifically excluded are:

• Temporary workers working within an outsource arrangement and who are under the direct supervision and control of the agency in the discharge of their duties
• Employees of the Agency, that is those workers under fixed term or permanent contracts of employment i.e. those entitled to pay between contracts.
• Self employed workers, ie those who are truly in business on their own account. The REC are working with the government to ensure the definition of self employed for the purposes of the regulations are bought into line with HMRC definitions and case law.

Day one entitlements

The important distinction regarding these entitlements is that they are the responsibility of the hirer not the agency and liability non compliance lies with the hirer.

The hirer is obliged to make all agency workers aware of existing vacancies at their organisation. This simply requires the worker to have access to the information in accordance with the same access of their peers. It does not mean that the hirer must directly impart the information to all its agency workers.

The hirer must make available collective on-site facilities such as canteens and crèches available to its agency workers. It should be noted that agency workers only have equal rights to these facilities and by association any matters such as waiting lists or entitlements of a permanent employer of equal status.

Amenities such as season ticket loans or subsidised club membership are excluded from the entitlements as they are considered to be associated with a long term employment relationship.

12 week entitlements

These entitlements are afforded to any agency worker after they have completed 12 weeks working in the same job. Importantly, the following conditions apply when calculating the working week:

• Any part of a week that is worked, eg one day, counts as a working week
• A change of agency does not cause a break in the 12 week accrual

The agency worker may also take a break from the position for any of the following reasons and the 12 month accrual will not be broken.

• Any period of less than 6 weeks
• Time off for public duty such as jury service
• Certified sick leave 28 weeks or less
• Statutory or contractual maternity, adoption or paternity leave

Once the 12 week qualifying period has been achieved, the agency worker is entitled to the same working and employment conditions as a peer within the hirer’s organisation. If a like for like employee or job role is not available to make a fair comparison, then pay scales and benefits outlined in company manuals and collective agreements may be taken into consideration.

When considering parity with regards to pay and benefits, the regulations specify that pay is ‘any sums payable to a worker of the hirer in connection with the workers employment…..’ This definition specifically includes:

• Holiday pay
• Shift allowances,
• Overtime rates
• Vouchers with a fixed monetary value
• Allowances for unsociable hours
• Bonuses that are directly attributable to the quality or quantity of work done by the agency worker

The regulations clearly stipulate that these workers are not entitled to items of remuneration associated with the status of a long term employee so specifically exclude items such as:

• Sick pay
• Company pension schemes
• Share options and other equity based schemes
• Loans
• Expenses
• Health / life insurance
• Bonuses based on organisational or company performance
• Claims for unfair dismissal
• Redundancy pay
• Maternity leave

Responsibilities

It is the responsibility of the Agency to ensure that they have taken reasonable steps to ensure the equal treatment of their temporary workers. It is also the responsibility of the agency to ensure that the workers are informed of their qualification under the 12 week rules.

The regulations recognise the interconnected relationships that exist between client, agency and third parties such as master vendors and umbrellas and will hold all parties accountable to any obstruction or otherwise of the information flow which enables the agency to ensure that equal terms are being offered to any temporary worker exceeding the 12 week qualifying period.

Claims

Action can be bought by a temporary worker in the form of an Employment Tribunal. Remedies will generally be compensation for the workers loss subject to a minimum award.

Anti avoidance measures are also in place to prevent any party from intentionally depriving the worker of his or her equal rights. These provisions primarily focus of the 12 week accrual and the claimant may be awarded up to £5,000 for a successful claim. A minimum award of two week’s pay subject to tribunal discretion also exists in order to discourage the undermining of the workers entitlements.