Legislation Update

What is the main purpose of the Agency Worker Regulations?
The regulations are aimed at giving agency workers, who work under the direct supervision of the client company, the right to the same basic working and employment conditions they would receive had they had been employed directly by the client (end hirer).

This includes agency workers who are supplied directly by the agency on a Contract for Services but also those supplied under a Neutral/Master Vendor arrangement and Umbrella Companies. The regulations are not designed to capture those who are “genuinely self employed” but the terms of each contract in this instance would have to be evaluated.

When to the regulations come into force?
The Regulations will come into force on 1 October 2011 – see below for Qualifying Period.

Qualifying Period/Criteria
An agency worker is only entitled to equal treatment once they have completed the qualifying period which is to be:

“in the same role with the same hirer for 12 continuous calendar weeks, during one or more assignments.”

• Same role – has to be “the same or broadly similar work”
• 12 continuous calendar weeks – if the worker only works for a part of a week, this will count as 1 week for the purposes of calculating the 12 week period
• Breaks - if the agency worker takes a break for six weeks or less, on returning to the same role, the weeks that the agency worker previously worked must be counted towards the 12 weeks – there are exceptions to this i.e jury service, sickness

It is important to note that anti avoidance criteria is built into the regulations to prevent abuse of qualifying criteria.

The 12 week counting period for workers already on assignment prior to the 1st October, 2011 will commence from this date forward i.e. the Qualifying Period is not retrospective.

Agency workers are entitled to certain rights from day one - see below for Day 1 Rights.

What constitutes Equal Pay?
The following elements are payable once the 12 week qualifying period has been completed

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

“Pay” is defined as “sums payable to a worker of the hirer in connection with the worker’s employment, including any fee, bonus, commission, holiday pay or other emoluments referable to the employment…..”

Pay is not just the basic hourly rate that an agency worker receives. There are other elements included in pay such as:

• Bonuses - will apply to any extra payments that are directly attributable to a worker’s individual performance e.g. piecework, shift allowance, personal bonus and commission.
• Annual Leave – agency workers will be entitled to the same holiday pay as permanent employed
• Vouchers – includes any vouchers which have a monetary value or can be exchanged for goods e.g. Luncheon Vouchers (but not Childcare Vouchers as these are part of a salary save scheme)

Day One Rights
From day 1 of an assignment agency workers will be entitled to access collective facilities which are available to permanent workers i.e. canteen, childcare facilities and transport services. (This is by no means an exhaustive list).

They will also be entitled to access to apply to a client’s existing vacancies in the same manner as permanent staff.

What is excluded from the definition of pay?
There are certain types of payments have been excluded from the definition of pay, these include:

• occupational sick pay (i.e. sick pay over and above statutory sick pay);
• a pension, allowance or gratuity in relation to retirement or compensation for loss of office;
• any payment in respect of maternity, paternity or adoption leave;
• redundancy pay;
• any payment in relation to a “financial participation scheme” i.e. a distribution of shares or options, or a share of profits in cash or shares;
• payments that a client pays to its own directly engaged workers which are not “directly attributable to the amount or quality of the work done by a worker, and which is given to a worker for a reason other than the amount or quality of work done such as to encourage the worker’s loyalty or to reward the worker’s long term service;”
• expenses;
• advances and loans;
• health and life insurance;
• other prescribed payments.

Comparators and Differentiation of roles
To determine equal pay, comparable employees should be identified – these are permanent members of staff who will be undertaking a similar role to the temporary worker. The following factors should be taken into consideration.

• Must be under the supervision and direction of the same hirer
• Undertaking “the same or broadly similar work”
• Levels of qualification and skills may be taken into account to establish a differentiation between roles undertaken by agency workers and those directly employed by the client but this must be substantial

If no comparable employee is based on site, one from another site should be located. If there is no actual comparator within the business a “hypothetical comparator” should be sourced – i.e. the worker should be paid the same rate that would have to be paid, in line with market rates, that would have to be paid as if the worker was employed directly by

Who is liable?
The Employment Tribunal will assign the liability to whichever organisation(s) it decides has caused the disadvantage to the worker. If the agency can show that it has made all reasonable efforts to establish and apply equal treatment, then the liability will lie with the hirer or some other part of the chain. Failure to provide the day 1 entitlements lies solely with the hirer.

What to do next?
ASC is in the process of contacting their clients in order to present the main aspects of the Regulations and to undertake an Impact Evaluation. Your usual Consultant will be in contact with you shortly but should you have any queries in the meantime, please contact our
Operations Director
Jane Storer on
0121 236 1662
email jane.storer@asc-connections.com