Government presses ahead with agency workers regulations

The government this week laid legislation before Parliament giving agency workers new rights, including the right to the same pay, holidays and other basic working conditions as directly recruited staff so long as they have worked for 12 weeks in a particular job.

The regulations, which implement an EU directive and follow a deal struck in 2008 by the TUC and the CBI, will come into force next year.

The rights to equal treatment on pay apply not just to the basic hourly rate but to all pay for work done, including bonuses directly related to the performance of the agency worker. However, they do not apply to benefits such as occupational pensions and sick pay.

The Agency Worker Regulations 2010 also include anti-avoidance provisions dealing with repeat assignments intended to prevent workers getting equal rights. Employment tribunals will be able to require employers to pay agency workers £5,000 where this happens. There will also be a general minimum award of two weeks’ pay.

Other benefits include the right to information on internal vacancies and equal access to on-site facilities such as child care and transport.

Business minister Pat McFadden said: “This change in the law is aimed at ensuring fairness for agency workers in relation to the permanent employees they work alongside. They are being implemented in line with the TUC/CBI agreement which sought to ensure fairness while maintaining flexibility for the UK labour market – a very important factor in our ability to create jobs."

Commenting on the regulations, Mark Hammerton, a partner at Eversheds, said that whilst autumn 2011 may appear some distance away, employers need to prepare now for the impact the legislation will have.

“Not only will the basic pay of temps who have worked with a hirer for more than 12 weeks have to be in line with their non-agency comparators (which includes both employees and workers), but bonuses (unless they are not directly attributable to work done) and other terms regarding working time, holidays and breaks will also have to be equalized,” he said. “In addition to the direct costs of implementation, of less immediate but still significant effect is the administrative burden of compliance. For instance, there are a number of potential ‘trip wires’ regarding the 12-week qualification period.

“All employers that use agency workers will also need to examine their staffing needs. The majority of agency assignments are already for periods of less than 12 weeks (45% are for longer) but, for those which exceed this period, the initial reaction of employers may be to decide to limit future assignments to less than 12 weeks. Other employers may seek to consolidate by moving to exclusive arrangements with larger agencies. Other alternatives may be to reduce reliance on agency workers by recruiting employees directly or perhaps creating an in-house ‘bank’ of casual staff. Other employers will simply expect their existing workforces to absorb the 'extra' work rather than hiring additional temporary workers.”

Hammerton also recommended that employers review their commercial terms with agencies to ensure they are protect the business and allocate risk appropriately.