ANALYSIS: Harriet McInnes from Howes Percival LLP in Norwich explains why businesses need to take note of agency worker changes

The Agency Worker Regulations 2010, which come into force on Saturday 1 October 2011, introduce principles of equal treatment between agency workers and staff recruited directly by the hirer, and are likely to have a significant impact on employers who regularly use agency workers.

The Regulations do not alter the employment status of agency workers, but they do give them two distinctive rights:-

1. The right, from day one of their assignment, to equal access to employment opportunities and collective facilities as if they had been directly recruited; and

2. The right, after undertaking the same role, for the same hirer, for 12 continuous weeks, to the same basic working and employment conditions as if they had been recruited directly by the hirer (including pay).

For most employers, a major consideration will be the principle of equal pay. 'Pay' includes not only basic pay, but other things like overtime, shift allowances, holiday pay and bonuses linked to individual performance. However, agency workers will have no right to claim occupational sick pay, contractual notice pay, contractual redundancy pay or benefits in kind (such as company car allowances or health insurance), nor will they be entitled to bonuses not linked to individual performance.

The 12 week period will be broken if the agency worker begins work with a different hirer, or begins work on a new assignment with the same hirer where the work or duties are 'substantially different'. It will be suspended in certain circumstances, for example where the agency worker is absent on sick leave, and will continue in other circumstances, such as maternity, paternity or adoption leave.

The Regulations also contain specific anti-avoidance provisions to ensure that hirers do not simply rotate agency workers to avoid the impact of the Regulations. Where an agency worker has carried out more than one assignment for the hirer and the structure of assignments was intended to avoid the Regulations, an Employment Tribunal can still hold that the agency worker is deemed to be entitled to equal treatment under the anti-avoidance provisions.

Most Read

Agency workers can enforce their rights in an Employment Tribunal, and are entitled to compensation to take into account any financial loss suffered. Tribunals can also make an additional award of up to �5,000 for any breach of the anti-avoidance provisions.

Employers should review their arrangements, taking into account the number of agency workers they use, the number of assignments lasting 12 weeks or more and any differences between the employment terms and conditions and access to collective facilities between agency workers and those recruited directly. Any differences that are contrary to the Regulations will need to be addressed and independent legal advice should be sought where employers are unsure.

If an employer is likely to be affected, it could consider:-

• only having agency workers from one agency (thereby reducing the administrative burden of having to keep numerous agencies informed of their terms and conditions);

• restricting assignments to less than 12 weeks – but the cost of regularly retraining staff will need to be considered; and/or

• increasing direct recruitment of employees and/or the genuinely self-employed.

Harriet McInnes is a Solicitor specialising in employment law at Howes Percival LLP's Norwich office.