Agency Worker Regulations 2011

Background

The Agency Workers Regulations 2010 will come into force in England, Scotland & Wales on 1st October 2011.

This will give temporary agency workers the right to equal treatment in terms of basic working and employment conditions as permanent employees. These rights will commence after the agency worker has worked in the same role for 12 calendar weeks with the same Client (end Client). In addition, agency workers will have day one rights of access to on-site facilities, and same access to information about job vacancies in the Client's business as other workers.

The Regulations are important legislation that affect Recruitment Agencies, Umbrella Companies and Clients in terms of their obligations. Therefore the following is intended to support our Clients by providing information on the Regulations and how SF Group will put systems in place to ensure adherence to the Regulations.


Frequently Asked Questions

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The Regulations stem from the EU, which gives agency workers the right to the same pay and other working conditions enjoyed by a Client's own workers.

Importantly, this does not alter an agency worker’s employment status, i.e. they do not become an employee of the Client or the Agency.

An agency worker will only be entitled to equal treatment once they have completed 12 weeks' of service (full or part-time) in the same role with the same Client, with the exception of Day One rights (see below).
The 12 week qualifying period begins when the Regulations come into force on 1st October 2011. It is not retrospective, so agency workers currently engaged on assignment will not start to accrue rights towards equal treatment until 1st October.

Day One rights are effective from 1st October, to which agency workers are entitled from the first day of an assignment.
There are two rights to which agency workers are entitled from the first day of an assignment:
  • Clients must inform agency workers of existing vacancies in their organisation, by ensuring that they have the same access to information about vacancies as other workers.
  • Agency workers will also be entitled to access collective on-site facilities such as canteen, car parking, crèche and childcare facilities, and provision of transport services. Agency workers can be subject to the same criteria to access the facility as someone directly recruited by the Client e.g. join a waiting list.
  • Amenities such as subsidised gym membership are outside the scope, as they are considered to be a reflection of the long term relationship between an employee & Client.
The Regulations define an agency worker as:
  • An individual
  • Who is supplied by a temporary work Agency to work temporarily under the supervision and direction of a Client; and who
  • - Has a contract (of employment or contract for services, for example) under which they provide their service personally for the Agency

Umbrella workers will generally not be in business on their own account, and so will generally fall within the scope of the Regulations.
  • Workers who have found a permanent job with a Client, even if they were introduced by an Agency
  • Workers who are genuinely in business on their own account (i.e. genuinely self-employed)
  • Workers working on managed service contracts (where the supplier rather than the Client manages or directs staff e.g. an outsourced IT contract)
  • Workers who are employed on a fixed term contract basis

Limited Company Contractors are not necessarily out of scope simply because they operate through a limited company.

However, freelance contractors who are in business on their own account and who operate through their own limited companies will generally be out of scope, provided that the status of the Agency/Client is that of a Client or customer of the freelancer's profession or business.
  • The Agency which supplies the worker to the Client
  • Umbrella companies
  • Any master or neutral vendors in the supply chain (i.e. involved in the supply of agency workers, but do not contract directly with the agency worker)

This means that all the above are responsible for ensuring that the agency worker receives their entitlements.
Except for the Day One rights (see above), the agency worker will be entitled to equal treatment once they have worked for 12 weeks in the same role at the same Client, whether full or part time. It is also irrespective of which or how many agencies supplied the agency worker to do the same role at the Client.

The qualifying period can be broken if:
  • A new assignment with the same Client is substantively different
  • There is a break of more than six weeks between assignments in the same role

The qualifying period will be paused (rather than stopped) if the agency worker takes:
  • A break of six weeks or less
  • Certified sick leave (for up to 28 weeks)
  • Jury service (for up to 28 weeks)
  • Shut downs e.g. school holiday
  • Industrial action

The qualifying clock continues where the agency worker takes:
  • A break which is related to pregnancy or childbirth
  • Maternity, adoption or paternity leave

Therefore an agency worker does not have to work for 12 consecutive weeks via the same agency to qualify for the right to equal treatment.
A qualifying agency worker is entitled to the same basic working and employment conditions as a worker recruited directly by a Client. This applies to:
  • Pay
  • Annual leave
  • Duration of working time
  • Night work
  • Rest periods
  • Rest breaks

This is in addition to Day One rights.

Equal pay will include:
  • Basic salary
  • Bonuses or commission payments linked to individual performance
  • Holiday pay
  • Overtime
  • Shift allowances

Equal pay does not include:
  • Pension
  • Occupational sick pay
  • Occupational maternity, paternity and adoption pay
  • Redundancy pay
  • Notice pay
  • Benefits in kind
  • Expenses
  • Advances and loans
  • Bonuses not linked to individual performance
  • Health and life insurance
  • Financial participation schemes e.g. Share or option schemes

If an Agency worker is paid more than the equivalent Client's own employees, the Client does not have to either decrease their rate of pay to that of employees, or increase the rate of pay to employees.
Pregnant agency workers will be entitled to paid time off to attend medical appointments and antenatal classes once they have achieved the 12 weeks’ qualifying service.

If an assignment is terminated on health and safety grounds, there is also a duty to find the agency worker suitable alternative work.
Yes, there is a specific Regulation that provides the possibility of exemption from AWR, but the agency worker must have a contract of employment with the Agency and meet certain conditions.

SF Group will not be engaging workers directly under a contract of employment, and therefore AWR is applicable.
Yes there are anti-avoidance measures to prevent Agencies and Clients from structuring assignments in a way to prevent the agency workers from reaching the 12 week qualifying period. This includes supplying a worker to connected Clients, rotating workers or repeatedly terminating and recommencing assignments to prevent the agency worker from accruing the 12 weeks’ qualifying period.

In the event that the Tribunal finds that the Regulations have been deliberately avoided, they can award an agency worker compensation of up to £5,000, in addition to the compensation they might receive where they have suffered as a result of breach of the Regulations.
Breach of Day One rights are the sole responsibility of the Client.

However, all intermediaries in the supply chain are responsible for ensuring the qualifying agency worker receives their entitlement. An employment tribunal would examine where the fault for the breach lies and will apportion liability, and any financial sanctions, accordingly between Agency, Client and Umbrella Company.

Next Steps

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It is essential that Clients that are likely to be affected by AWR firstly understand the Regulations, and secondly prepare in advance of the implementation date of 1st October 2011.

It is recommended that Clients undertake an impact assessment on their business, and it may be helpful to produce:

  • A checklist of information to issue with a temporary role specification
  • An audit to identify any differences in current pay and benefits or working conditions that might need to be addressed when AWR comes into force, and also to compile comparator information
  • An audit of the temporary workforce to identify where AWR is likely to be applied

To help with the impact assessment, the REC (Recruitment and Employment Confederation) have produced a useful checklist/planner, which can be accessed via the attachment below:

REC IMPACT ASSESSMENT CHECKLIST / PLANNER


Please contact your SF Group Consultant if you need any further information or advice.


We at SF Group are taking a number of steps, in addition to internal briefing, to ensure that we are ready before the Regulations come into force on 1st October:
  • Client letters will be sent shortly regarding current temporary workers, to explain what is happening and to request comparator information
  • Information gathered from Clients will be stored centrally
  • Assignment lengths will be tracked and Clients informed before the qualifying stage where AWR are likely to apply
  • For every temporary worker job offer we receive where AWR is likely to apply, the Client will receive a request for information on pay and working and employment conditions of equivalent permanent comparators
  • Where applicable, SF Group will share this information with the relevant umbrella company to ensure everyone in the supply chain is compliant
  • SF Group will be amending its Terms & Conditions to ensure that our responsibilities under AWR are reflected contractually. Letters of variation will be sent to Clients as appropriate.