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The agency sector forms a large and important part of the UK labour market (approximately 1.3m workers or 5% of the workforce).  Employers would be well advised to use the time between now and October 2011 to assess the impact of the Regulations on their own practices and take any necessary action.

The key aspects of the Regulations are as follows:

Scope:  The definition of 'agency worker' includes both those taking up temporary work through an employment agency and those employed via umbrella companies or other intermediaries.  It excludes those who are genuinely in business on their own account (i.e. self-employed or working through a corporate vehicle).

Equal Treatment:  The right is to the same basic working and employment conditions as if the agency worker had been recruited directly by the hirer.  This includes entitlement in respect of working hours, night work, rest periods and breaks, overtime and annual leave.

Pay:  The principle is 'equal pay for work done' - i.e. basic pay plus other contractual entitlements that are directly linked to the work undertaken by the agency worker (for example, overtime, shift allowances, unsocial hours premiums).  It excludes aspects of remuneration provided in recognition of the long-term relationship between employer and permanent employee (for example, profit-sharing schemes, occupational pension contributions, occupational sick pay, maternity pay and redundancy pay).

Qualifying period:  The qualifying period for the right to equal treatment will be 12 calendar weeks in a particular job.  A new qualifying period will only begin if the new assignment with the same hirer is 'substantively different' or if there is a break of more than six weeks between assignments in the same role.  The Regulations include anti-avoidance provisions.

The comparison:  In most cases this will be to a 'comparable employee' doing the same or similar work.  However, as the agency worker is entitled to be treated as if they had been recruited directly, a 'flesh and blood' employee comparison may not always be necessary.  Draft guidance on this issue has been published.

Liability:  Primary liability will rest with the agency.  However, where it is reliant on information provided by the hirer, and has taken 'reasonable steps' to obtain information and acted 'reasonably' in determining basic working and employment conditions, the hirer may be liable.

Dispute resolution:  Claims may be brought in an employment tribunal subject to a three-month time limit.  There is a minimum award of two weeks' pay, no upper limit on compensation and an additional award of up to £5,000 for breach of the anti-avoidance provisions. 

The Government has stated that guidance to accompany the Regulations will be published at least 12 weeks before they come into force.

This entry was written by Hannah Vertigen