Agency Workers Regulations

Implemented in October 2011, the purpose of the Directive is to provide temporary agency workers (including Umbrella workers) with equal treatment in terms of basic working and employment conditions as if they had been recruited directly by the end user hirer.

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The Agency Workers Directive was implemented in the UK on 01 October 2011 via the Agency Workers Regulations 2010. The purpose of the Directive is to provide temporary agency workers (including Umbrella workers) with equal treatment in terms of basic working and employment conditions as if they had been recruited directly by the end user hirer.

Although certain day 1 rights must be in place when the agency worker commences work, the main equal treatment entitlements are effective when they have served a 12 week qualifying period with the hirer.

The following Frequently Asked Questions cover key areas that relate to the Regulations:

1. What areas are covered by equal treatment?

An agency worker is entitled to the same basic working and employment conditions as they would have received had they been recruited directly by the hirer to do the particular job.
Basic working and employment conditions are those that relate to pay and working time (including annual leave, rest breaks, rest periods and night work).

2. What day 1 rights do agency workers have?

From 01 October 2011, all agency workers are entitled to use collective facilities, such as canteens and childcare facilities, on the same basis as employees of the hirer. Note – access to some facilities, such as car parking, may be denied if there is a waiting list.

Agency workers also have the right to be informed of relevant vacant posts within the hiring organisation. This rule is designed to give agency workers the same opportunities as staff workers to secure permanent employment.

Agency workers also have the right not to suffer a detriment for asserting their rights under the regulations.

3. How is the 12 week qualifying period calculated?

Once an agency worker has worked in the same role for the same hirer for 12 continuous calendar weeks (regardless of how many hours they work each week) they will qualify for equal treatment.

It does not matter whether they complete the 12 weeks in a single assignment or in a number of assignments, and whether it was through the same agency or different agencies.

4. How long a break can an agency worker take without breaking the 12 week rule?

A break between assignments of less than six calendar weeks will not break continuity between assignments.

If an agency worker worked on an assignment for 10 weeks, then had four weeks where they were not working for the hirer and then returned to the same job, they would be entitled to equal treatment two weeks into the second assignment.

5. What about the holiday pay entitlement?

If the agency worker remains employed with the agency then they will be entitled to the minimum holiday pay of up to 28 days a year, pro rata, depending on hours worked and calculated in accordance with the Working Time Directive.

If the agency worker works 12 weeks with the same hirer, after the 12 weeks their holiday pay should be calculated on the same basis as a permanent employee doing the same job engaged directly by the hirer. For example, if the permanent employee is entitled to 28 days a year, the agency worker would be entitled to the same after 12 weeks.

6. What bonus entitlements will agency workers have?

The concept of pay includes bonuses, so agency workers who have completed the qualifying period may be entitled to bonuses.

Whether this is the case or not will depend on the nature of the bonus scheme. For example, bonuses that are not directly attributable to the amount or quality of work done by a worker and which are given to encourage loyalty or reward long-service are specifically excluded from pay.

7. What is Swedish Derogation?

The Swedish derogation is an opt-out clause from the Regulations – it is covered by Regulation 10. It means that AWR rights to equal pay and conditions of an agency worker are negated when they are employed on a permanent basis by a temporary work agency (TWA). They must however be paid when they are in between contract assignments.

To qualify for the Swedish Derogation opt out, the agency worker needs to be genuinely employed by the TWA with a permanent contract of employment in place. This contract must be entered into prior to the start of the worker's first assignment.

As mentioned, the TWA will have to pay agency workers when they are in between assignments and have to ensure that they are offered any available work.

When an agency worker is between assignments, they must be paid at least 50% of their contract rate (the highest rate of pay received in the previous 12 weeks of work and at least at minimum wage) for at least 4 weeks before a contract can be terminated, unless the employee resigns.

In practice, the agency worker will enter into a permanent contract of employment with the TWA. The TWA then becomes responsible for paying the agency workers salary.

Note - this reduces a recruitment agency's AWR responsibilities - there has however to be a close professional relationship between recruitment agencies and TWA’s.

The Contract of Employment must detail the following;

  1. Client details
  2. Minimum pay rates and how calculated
  3. Work location and travel
  4. Expected hours of work (minimum/maximum)
  5. The type of the work to be undertaken

The Contract of Employment will also confirm that the agency worker becomes an employee of the TWA and it will detail an exemption from section 5 of the Regulations where they relate to equal treatment provisions on pay.

Equal treatment in respect of duration of statutory maternity pay, paternity pay, sick pay, night work, rest periods, rest breaks & paid annual leave are not affected by Swedish Derogation.

8. What maternity/paternity rights do agency workers have?

Maternity - After completing 12 weeks on an assignment, a pregnant agency worker will be allowed time off to attend ante-natal appointments and classes.

If they can't complete the duties of the assignment on health and safety grounds the agency will be required to identify alternative work paid at the same rate or higher than the original assignment for them. If no alternative work can be found the agency is required to pay the worker for the expected duration of the original assignment.

The pregnant agency worker does not receive any additional rights under the Regulations beyond those that they are already entitled to, nor do they have a right to return to work after maternity leave."

Paternity - An agency worker must accrue 26 weeks' service ending 14 weeks before the week of childbirth before exercising the right to paternity leave under existing paternity leave regulations, if employed by the agency or hirer.

Paternity pay is excluded from AWR.

9. What about unfair dismissal?

The agency worker can bring claims against the agency and/or hirer for failure to pay them on the same basis as an employee engaged directly by the hirer, and or breach of contract.

Alternatively, if assignments are structured in a way to prevent the agency worker from accruing 12 weeks' service a claim can be brought on this basis.

Compensation will be calculated upon a just and equitable basis and not normally less than two weeks pay. In the case of structuring assignments to prevent 12 weeks from accruing, compensation of up to £5,000 may be awarded.

10. Are any workers excluded from the Regulations?

The following workers are excluded:

  • workers hired via their own PSC – they must however be outside of  IR35 legislation
  • the genuinely self-employed
  • those working under the supervision and direction of a supplier rather than a hirer
  • workers such as cleaners who work via managed service companies

For further information and advice, please contact us or call one of our qualified advisors on 0161 703 2549.