Agency Workers Regulations - Client Briefing

The Agency Workers Regulations 2010 (the AWR or Regulations) will come into force on 1st October 2011. The AWR will give agency workers (i.e. those temps supplied to you by us, via umbrella companies and through other temporary work agencies) the right to the same basic terms and conditions as employees directly employed by you to do the same job - once they have completed a 12 week qualifying period.

The AWR do not apply to:

• Fixed term employees
• Independent contractors - i.e. genuinely self employed individuals or limited company contractors.

The Regulations do not impose employment status between you and your temps and agency workers continue to offer a flexible solution for clients.

Over recent months, the interim recruitment teams across all divisions of The SR Group (comprising Brewer Morris, Carter Murray, Frazer Jones, Parker Wells, SR Search and Taylor Root) have been participating in training on the AWR. Our impact assessments have involved us looking at the key practical issues arising under the Regulations.  Our view is that avoiding the Regulations by terminating assignments at 11 weeks or engaging only limited company contractors does not offer a practical solution and indeed, would be caught by the anti-avoidance measures in the Regulations.

Our impact assessments have revealed that while there are some difficult areas to deal with under the Regulations (e.g. holiday and bonus entitlements), by creating and implementing new processes and policies, compliance with the AWR once they come into force on 1st October 2011 does not have to be a major headache.

The purpose of this briefing note is to demystify the Regulations, share some of the responses we have received from clients as part of recent impact assessments and provide you with answers to some frequently asked questions.

In a nutshell - What rights will an agency worker have after 1st October?

A. Day One Rights

On 1st October 2011, any agency worker who either is working for you on an existing assignment or who starts an assignment with you on or after 1st October will be entitled to be:

• Informed of any relevant job vacancies within your organisation; and
• Given access to on-site facilities and amenities that you provide to your comparable employees such as on-site canteens, on-site child-care facilities and transport services (but not benefits such as season ticket loans and company car allowances).

B. 12 Week Rights

After 12 weeks in the same job with the same hirer, agency workers must be given the same basic working and employment conditions as they would have received had they been directly recruited by you.

Basic working and employment conditions are those that you ordinarily include in your contracts and associated documents for your employees. They could be found in pay scales/grades used by you to set the salary for particular roles, staff handbooks and collective agreements.

If you don't have any basic terms and conditions that generally apply across your organsiation then you will need to consider whether you have an employee or worker working in your organisation in the same position as the agency worker. In this case you would treat the agency worker in the same manner as the comparable employee or worker when setting the rate of pay.

If you do not have a:

• general policy; or
• comparable employee/worker

In your organsiation then the agency worker's entitlements would not change after 12 weeks on the assignment.

C. What constitutes basic working and employment conditions?

INCLUDED:

• Basic pay - based on the annual salary an agency worker would have received if recruited directly (usually converted into an hourly or daily rate);
• Individual performance bonuses - attributable to the quality or quantity of work done;
• Working time - including overtime and shift/unsocial hours payments;
• Payment for annual leave - any entitlement above the statutory minimum of 5.6 weeks (inclusive of public holidays) can be added to the agency worker's hourly or daily rate; and
• Vouchers or Stamps which have a fixed monetary value - e.g. luncheon and childcare vouchers.

EXCLUDED:

Payments and benefits normally associated with employment status such as:

• Contractual and statutory redundancy and notice pay;
• Company sick pay, maternity/paternity pay;
• Compassionate leave and paid time off for jury service;
• Season ticket loans;
• Accommodation/travel expenses;
• Share option/ownership schemes;
• Any benefits requiring an eligibility period of employment if not met by the agency worker (e.g. being employed on the day that an annual bonus is paid or increased holiday entitlements after 2 years of employment); and
• Occupational pension (although agency workers will obtain pension rights under the Pensions Act 2008 in 2012).

Client Feedback - Impact Assessments

As part of a recent impact assessment, we approached a number of our clients to assess how the AWR would impact on current assignments if the Regulations were already in force.

The most common responses were:

• "Our agency workers work on a specialised project and there are no comparable employees or workers within the organisation".
• "Our agency workers are paid more than our standard rates of pay for employees at the same level and more therefore than direct hires".
• "The only difference in treatment between direct hires and agency staff is with respect to holiday entitlements, flex-benefits and bonus entitlements".

Research from the CIPD and REC suggests that as little as 13% of temporary workers would see an improvement in their pay and benefits packages once the Regulations come into force and our research bears this out.

Questions & Answers

Day one rights

We publish job vacancies on our intranet and temps do not have access to this - will this have to change?

Agency workers need to be able to access information about relevant vacancies (whether it is via the intranet or on a notice board in a communal area or via newsletters or emails) and you should consider allowing intranet access for this purpose or providing agency workers with vacancy lists via another medium (e.g. via email).

We have a long waiting list for car parking spaces - do we have to provide parking spaces for agency workers?

You simply have to treat the agency worker in the same way as any comparable employees. You do not have to afford them special treatment. If your comparable employees would be added to the waiting list for a car parking space then you should do the same for the agency worker.

How should we prepare ourselves for giving access to day one rights?

If you have or will have a number of agency workers working on assignments within your organisation, it would be sensible to put together induction packs which let them know about your facilities and how they can access them. This could then be given to us to supply to any agency worker (as part of the information requests process that we will put in place) or it could be provided on the first day of the assignment at the same time as any on-site health and safety briefing carried out by you.

12 week rights

We have a number of agency workers on long term assignments - will they be entitled to equal treatment on 1st October 2011?

No, they will qualify for equal treatment 12 weeks after the commencement of the Regulations (i.e. in the week commencing 25th December 2011). In our view you should map out now what increases in pay and bonus or holiday adjustment might be required once they pass the qualifying period and discuss this with us.

You will need to give your agency workers access to onsite facilities and relevant job vacancies (i.e. day one rights) with effect from 1st October.

We have 10 agency temps working as paralegals on a large ongoing case. We don't employ any other paralegals - will they stay on the same rate of pay in December?

Again you need to think about any other general terms and conditions that you have which could apply - for example with respect to holiday or bonuses. If there are no general terms or policies then no change would be required.

We negotiate each package individually and so all of our staff are paid at different rates and there is no going rate for the position - can we still adopt this approach?

If this is the case and you are absolutely sure that there are no generally applicable basic terms and conditions then you can set the rate of pay as you wish in consultation with us (providing written confirmation that this is the case) and no change will be needed after the agency worker has spent 12 weeks in the assignment.

We pay agency workers a higher hourly rate than we would pay a full-time employee in the same position but agency workers get less holiday - can we say that their package is the same overall?

Overall package comparisons are not permissible under the Regulations and you have to ensure parity of individual terms such as pay, bonus and holiday. The majority of clients with whom we have spoken have confirmed that they pay agency workers at a higher hourly rate than their permanent employees and the key differential is usually with respect to holiday.

We envisage that, where an assignment is likely to last longer than 12 weeks, in operating best practice, clients will factor in the increased amount of holiday required for the agency worker at the start of the assignment so that no change will occur after 12 weeks. This increase could be offset by reducing the rate of pay and for administrative ease a payment in lieu of any holiday in excess of the statutory entitlement could be paid out at the end of the assignment.

What happens to the qualifying period if there is a break between assignments?

After a 6 week break, the 12 week qualifying period starts again. However, the "clock" will be paused and continuity will not be broken in the case of sick leave (up to 28 weeks), jury service (up to 28 weeks), annual leave, industrial action and shut-downs.

If the agency worker takes time off as maternity, paternity or adoption leave, the clock continues ticking (i.e. this will not break continuity) for the originally intended duration of the assignment or the likely duration of the assignment (whichever is longer).

We have various performance related bonus schemes - do we have to include agency workers in them?

This will depend on whether the bonus arrangement falls within the scope of the Regulations. If it is a bonus based on individual performance then you will need to consider agency worker entitlement to ensure that they receive equal treatment in this regard.

Any qualifying criteria for entitlement to the bonus that would apply to comparable employees and workers (such as a requirement that an individual is employed and not under notice on the date that the bonus is paid) would apply equally to agency workers.

You may want to set up a separate performance appraisal system for agency workers and we would be happy to discuss this with you.

Are pregnant temps going to have the right to maternity pay and leave after 1st October 2011?

No - there is no change to agency worker entitlements to statutory maternity pay (which we take care of) and agency workers are not entitled to maternity leave as they are not employees.

However pregnant agency workers will be entitled to paid time off to attend ante-natal appointments as well as additional health and safety measures (such as suitable alternative work) if a pregnant agency worker cannot fulfil her role due to a health and safety risk.

Who is liable for a breach of the Regulations - the client or the agency or both?

As clients will be responsible for providing access to onsite facilities (over which the agency has no control) the client will be liable if they unjustifiably fail to grant access to internal vacancy lists or an on-site creche (i.e. day one rights).

If an agency worker claims that they have not received equal treatment with respect to basic pay and employment conditions after 12 weeks in an assignment then any party in the chain of relationships can be liable to the extent that the breach is their fault.

The agency would have a defence to such a claim if it can show that it took "reasonable steps" to obtain the necessary information from the client to ensure parity of treatment and acted reasonably in determining basic employment and working conditions. Responsibility for any breach would then shift to the client hirer.

Temps will be able to request information in writing from the hirer with respect to day one rights and from the agency (after 12 weeks in the assignment) with respect to pay and conditions.

In both cases, the client hirer or agency will have 28 days to respond. If a claim cannot be resolved through this process, an agency worker will be able to present a claim to the employment tribunal regarding the alleged less favorable treatment within the period of 3 months from the date of the alleged breach.

In successful claims, tribunals will compensate agency workers for any loss of earnings related to their entitlements under the Regulations. The minimum award in successful claims will be 2 weeks' pay and the maximum is uncapped.

Steps to Take

We recommend that you:

• Take steps to increase awareness of the Regulations across line managers responsible for recruitment and management of agency workers.
• Understand how the improved rights of agency workers might operate in your working environment and the changes that would be required.
• Assess pay differentials between direct hires and agency staff in current long term assignments - by considering the list of items included in the definition of pay referred to above.
• Assess holiday differentials between your standard terms and conditions and potential comparable employees and agency workers.
• Consider whether any policy adjustments are required to minimise costs post 1st October 2011.
• Share your findings with us so that we can help you prepare for the Regulations.
• Take our own legal advice on the application of the Regulations to your business.

If you have any queries concerning the approach of The SR Group to the Agency Workers Regulations, please do not hesitate to contact Mark Brewer.

Disclaimer:

This publication was prepared by The SR Group for information purposes only. Every reasonable effort was made to make the information accurate and up to date but no responsibility for its accuracy and correctness or for any consequences of relying on it, is assumed by The SR Group.
The Information contained in this document does not and is not intended to amount to legal advice.

 

"The AWR will give agency workers the right to the same basic terms and conditions as employees directly employed by you to do the same job - once they have completed a 12 week qualifying period."

 

 

 

 

"After 12 weeks in the same job with the same hirer, agency workers must be given the same basic working and employment conditions as they would have received had they been directly recruited by you."