Agency worker regulations set to come into force

The Agency Workers Regulations 2010 are due to come into force in October 2011 despite having prompted a very mixed reaction from unions, employer organisations and temporary work agencies. The regulations will implement the 2008 EU temporary agency work directive in the UK, and they entitle agency workers to be treated equally with comparable employees, with regards to basic employment conditions. They are applied after an agency worker has spent 12 weeks in a given job.

Background

The Agency Workers Regulations 2010, which take effect on 1 October 2011, are based on an agreement reached in May 2008 between the previous Labour government, the Confederation of British Industry (CBI) and the Trades Union Congress (TUC) on the implementation of equal treatment for agency workers (UK0806039I). The central element of the agreement was that agency workers would be entitled to equal treatment with directly-employed staff after 12 weeks in a job. The agreement at UK level facilitated the eventual adoption of the EU temporary agency work directive (Directive 2008/104/EC).

The Conservative-Liberal Democrat coalition government, elected in May 2010, was sympathetic to criticism from employers of the Agency Workers Regulations, and carried out a review. However in October 2010 the government announced that the legislation would not be amended (UK1011019I), as discussions with the CBI and TUC over potential changes had not reached agreement. Any amendments to the regulations that affected the subject matter of the CBI and TUC agreement, and which did not have both parties’ agreement, would risk being overturned in the event of a challenge in the courts.

Employment Relations Minister Ed Davey said:

We looked carefully at the possibility of amending the regulations to address employers’ concerns but we were forced to conclude that we could not do so without putting the 12-week qualifying period at risk. This qualification period is something that is a key flexibility that we know is vital to business.

Main provisions

The principal aim of the regulations is to ensure equal treatment of an agency worker who has been with the hirer for 12 weeks in a given job. The agency worker will be entitled to basic working and employment conditions that are equal to those of the hirer’s own employees. The relevant terms and conditions are:

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

The 12-week qualifying period need not be a continuous period. Most breaks during an agency worker’s assignment to the same job that are less than six weeks in length will only have the effect of pausing the accrual of the 12-week qualifying period.

The regulations aim to ensure that agency workers have the same relevant terms and conditions as a ‘comparable employee’ of the hirer. The agency worker and the employee must be engaged in the same or broadly similar work.

The regulations also give agency workers access rights to collective facilities and amenities provided by the hirer, and to be informed of employment opportunities with the hirer. These rights apply from the first day of the agency worker’s assignment.

If the regulations are breached, the temporary work agency and the hirer can in some circumstances both be liable. If an employment tribunal finds that the structure of an assignment is intended to prevent an agency worker being treated equally, the regulations provide for compensation of a minimum of two weeks’ pay, and an additional award of up to GBP 5,000 (€5,672 as of 6 September 2011).

Government guidance

In May 2011, the government published detailed guidance on the agency workers regulations (330Kb PDF) to help employers and the recruitment sector prepare for the introduction of the regulations.

Launching the guidance, Ed Davey said:

We have collaborated with key organisations including employment agencies, employers, trade unions and representative bodies to develop this guidance and I believe the resulting document will prepare everyone for the forthcoming changes.

Social partner views

Employer organisations have been strongly critical of both the EU directive and the UK regulations. According to the CBI, the regulations have been ‘gold plated to include extra process costs for employers not required under European law’.

For example, the CBI considers that the regulations are unnecessarily complicated by requiring firms to pay performance-related bonuses based on agency workers’ performance rather than just an additional pay allowance to achieve equal treatment.

The CBI has also criticised the present UK government for failing to revise the regulations, and maintains that simplifications could be made without changing the terms of the CBI-TUC deal. The Institute of Directors (IoD) has described the regulations as ‘one of the worst pieces of employment regulation in the last 10 years’.

The Recruitment and Employment Confederation (REC), representing recruitment agencies, believes that ‘implementation will create some challenges, but the regulations do not fundamentally impact on the crucial flexibility that agency work provides’.

The TUC is in favour of the legislation and, as noted above, has resisted pressure from employers and the present government for deregulatory changes.

Mark Hall, IRRU, University of Warwick

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