Agency worker rules come into force

3 October 2011

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3 October 2011 | Christopher Syder

With effect from 1 October, temporary workers hired through agencies can now earn the same employment rights as permanent staff after 12 consecutive weeks.

As a result, many hirers are focusing on the rights the agency worker will get 12 weeks into a particular assignment. They will have the right to the same terms and conditions of employment as if they had been employed directly by the hirer to do the same job as a comparable employee. This right is not retrospective, so the earliest it can be gained is 24 December 2011. ‘Relevant terms and conditions’ means those normally set out in standard contracts, pay scales, collective agreements and terms generally included in a company handbook or similar.

In many cases, calculating the 12-week qualifying period will be a straightforward. However, agencies and hirers should be alert to a number of circumstances in which breaks do not prevent agency workers from completing the qualifying period, but only pause it temporarily. These include:

• A break of six weeks or less
• Certified sick leave for no more than 28 weeks
• Statutory/contractual maternity, adoption or paternity leave
• Time off for public duties (including jury service)

The period is only stopped completely if there is a break of more than six weeks.

In these challenging economic times, pay is a particular area of focus. This includes fees and commissions, bonuses based on individual performance, shift/unsociable hours allowances and holiday pay. Many hirers are understandably reticent to disclose their pay scales/details, but in relation to a failure to provide basic working and employment conditions, legal liability can rest with either the temp agency and/or the hirer. The agency will initially be responsible for any breach, although it will have a defence if it can demonstrate that it took reasonable steps to obtain information from the hirer.

If a hirer fails to provide information to the agency, which results in the agency worker not receiving equal treatment, then legal liability could rest solely with the hirer. It is, therefore, in the interest of both the hirer and agency to make sure they have appropriate procedures in place to ensure proper provision of relevant information.

Consequently, hirers and agencies are examining the potential exemption from the need to provide equal treatment in respect of pay. An exemption applies where the agency provides the agency worker with a permanent contract of employment and pays the agency worker between assignments, for example when they are not working for a hirer. This is referred to as the “Swedish derogation model”. A number of umbrella companies are looking to implement this model, which will take the workers outside of the scope of the pay requirements.

However, for the Swedish derogation model to work, the rate of pay between assignments must be at least half the rate of pay that the agency worker would receive on assignment, calculated on the basis of the highest number of hours and pay rate from the preceding 12 weeks. Nevertheless, the Swedish derogation model does not offer a complete solution. It only provides an exemption from the entitlement to equal pay after 12 weeks. Agency workers will still be entitled to the remaining elements of equal treatment after the qualifying period.

* Christopher Syder is a partner and head of employment at Davies Arnold Cooper

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