18 October 2011

The Agency Workers Regulations 2010 - it's not all doom and gloom!!

The Agency Workers Regulations 2010 SI 2010/93 came into force on 1st October, giving effect (eventually) to the 2008 EU directive on temporary agency work. The government has given in to the inevitable, albeit not gracefully - there is still talk of removing any "gold plating" of the EU requirements, for example by amending them to take one man service companies out of the scope of the regulations.

In brief, the Regulations give agency workers the right to equal treatment on basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer. Most of these rights apply after 12 weeks' service but some, notably the right to access to the hirer's facilities such as a canteen, transport between sites or a crèche, and to access to information on permanent vacancies, apply from day one.

There has been a lot of coverage on the possible negative impact on the economy (see for example this report from Allen & Overy of 12th September 2011), but in the spirit of "it's not all doom and gloom", here are a few points which may reduce the impact for individual employers: 

• The Regulations are not retrospective, so that agency workers in place on 1st October need to clock up 12 weeks' employment after that date to qualify for rights; 
• Continuity of service will be broken if there is a gap of 6 weeks or more between assignments, the agency work starts an assignment for a different hirer or starts a new, substantively different, role for the current hirer; 
• The right to equal treatment excludes rights to occupational pension and contractual sick pay schemes, plus other benefits such as the right to notice pay, season ticket loans and many benefits in kind;  
• One-off non contractual bonuses are also outside the scope of the Regulations, although discretionary bonuses paid routinely are likely to fall within them;  
• In most cases, it will be possible to exclude agency workers from the full appraisal system; 
• It may be possible to justify less favourable treatment of agency workers in relation to access to facilities;  
• Many periods when the temp is away, such as periods of leave or sickness or shut-down, will be excluded when calculating periods of employment.  

Employers who use agency workers heavily have had plenty of time to plan for these Regulations, and will doubtless be looking at various alternatives to long-term use of agency workers.

Many employers will look at introducing breaks between assignments - but to be effective such breaks must be at least 6 weeks, and not surprisingly anti-avoidance provisions are in place to prevent parties structuring hires to build in breaks to avoid the effect of the Regulations. However, there seems to be nothing to stop agencies or hirers adopting the practice of limiting all assignments to less than 12 weeks, although this will have costs - for example those involved in continually training new agency staff. Other options employers will be looking at include forming their own bank of in house temps, or taking on fixed term workers instead of agency workers (although that approach, of course, has its own complete set of considerations to take into account).