Employment and HR

A Guide to the Agency Workers Regulations

The Agency Workers Regulations 2010 (AWR) came into force on 1 October 2011. They apply to those workers who are supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer.

All temporary agency workers are entitled, from the first day of their assignment, to information on any job vacancies and to make use of collective facilities and amenities available to comparable workers and employees. These may include staff canteens, childcare facilities, transport services (such as local pick-ups and drop-offs and transport between sites – but not company car allowances or season ticket loans), staff common rooms, prayer rooms and car parking.

Employers should ensure that temporary agency workers know how to access information relating to job vacancies and are aware of all relevant facilities. This can be done either by providing details directly to the worker, as part of an induction pack, or by providing details to the employment agency to pass on to the agency worker as part of the information on the assignment.

Agency Workers Who Have Completed a 12-Week Qualifying Period
Once a temporary agency worker has worked in the same job for the same hirer for a period of 12 calendar weeks, they are entitled to the same basic employment and working conditions as if they had been recruited directly by the employer.

Because the working patterns of temporary agency workers can be irregular, the AWR provide for a number of circumstances in which breaks do not prevent them from completing the qualifying period. Employers are therefore advised to study the rules for calculating this period in order to avoid errors.

Basic employment and working conditions include:

  • *basic pay;
  • duration of working time;
  • annual leave;
  • night work; and
  • rest breaks and rest periods.

*N.B Under the 'Swedish derogation' – so called because it was introduced into the AWR at the request of the Swedish Government – there is currently an exemption from the requirement to provide the same pay and conditions as far as pay is concerned where the temporary work agency offers an agency worker a permanent contract of employment and pays the worker between assignments. However, following Matthew Taylor's Good Work Review, the Government announced its intention to repeal the Swedish derogation and has confirmed that the legislation to do so will come into force in April 2020.

The rights with regard to pay include:

  • basic pay based on the annual salary the agency worker would have received if recruited directly – this will usually be converted into an hourly or daily rate, taking into account any pay increments the worker would have received;
  • overtime payments – subject to the same requirements as if the worker had been recruited directly;
  • payment for annual leave;
  • bonus or commission payments linked to the amount and quality of work completed – e.g. achievement of sales targets;
  • bonuses linked to personal performance or non-contractual payments that are made with such regularity that they are customary;
  • vouchers or stamps which have a monetary value and can be exchanged for money, goods or services – e.g. luncheon vouchers, childcare vouchers but not salary sacrifice schemes; and
  • paid time off for antenatal appointments.

Some payments may require those recruited directly to complete a period of service – e.g. enhanced entitlement to annual leave after 12 months. A temporary agency worker will need to complete the same period of service to become eligible. This should be calculated from the start of the 12-week qualifying period.

The rights with regard to pay do not include:

  • occupational schemes – sick pay, maternity, paternity and adoption pay;
  • redundancy and notice pay;
  • payment for time off to carry out trade union duties;
  • guarantee payments, as they apply to directly recruited staff if laid off;
  • advances in pay – e.g. for season tickets;
  • payments or rewards linked to financial participation schemes such as share ownership;
  • the majority of benefits in kind – e.g. reduced-rate mortgages or employer-funded training allowances;
  • bonuses where there is no recognition of a worker’s personal contribution, such as a flat rate bonus paid to the workforce to encourage loyalty or reward long service; and
  • additional, non-contractual bonuses – as long as these payments are not made so often that they have become customary.

Temporary agency workers are covered by the automatic pension enrolment scheme. For further information, see the website of the Pensions Regulator.

To ensure equal treatment after 12 weeks’ service, employers who use temporary agency workers should have in place proper job descriptions and pay structures for the roles they perform. In addition, to facilitate calculation of the qualifying period, a record should be maintained showing the dates and hours worked, the location of their work and their job role. Employment agencies should be provided with information on the basic terms of comparable staff hired directly by the employer.

The AWR contain anti-avoidance provisions which prevent a series of assignments being structured so as to prevent a temporary agency worker from completing the qualifying period. Breaks between assignments will not, therefore, necessarily prevent agency workers from gaining the same basic employment and working conditions as staff recruited directly.

The Court of Appeal recently rejected arguments that agency workers have a legal entitlement to work an equivalent number of contractual hours as directly employed staff (Kocur v Angard Staffing Solutions Limited and Another). The Court found that the clear purpose of the Directive underlying the AWR is to ensure the equal treatment of agency workers and permanent employees while at work, and in respect of rights arising from their work. There is nothing in either the preamble or its actual provisions to suggest that it is intended to regulate the amount of work an agency worker is entitled to be given. To rule otherwise would be contrary to the whole purpose of using agency workers, which is to enable businesses to meet ups and downs in their need for labour and to offer flexible hours to agency workers – a purpose which the Directive expressly recognises and endorses.

Detailed guidance on the AWR can be found on the website of the Department for Business, Innovation & Skills.

For further information please call one of our experts on: