Agency worker rights should be set in comparison with staff, advises Government

There is no obligation for companies to make a comparison to establish the workers' rights, but it will help firms comply with new regulations governing how temporary staff should be treated, the BIS said.

Temporary agency workers will be entitled to the same employment and working conditions from employers as those given to staff when the UK's new Agency Workers Regulations come into force on 1 October. They will implement the EU's Agency Workers Directive.

The Regulations apply to agency workers who successfully complete a 12 week qualifying period. The Regulations will apply to companies that hire agency workers and agencies that supply the temporary staff.

Equalising working conditions includes making sure agency staff are paid as much as directly employed staff, the BIS said. Employers can compare permanent staff to agency workers to work out what they should be paid, it said.

"A comparator needs to be engaged in broadly similar work, but account can be taken of their skills and qualifications as this may justify a higher level of pay for the comparator. They must work at the same or, if there is no comparable employee in the same workplace, in another of the hirer’s workplaces. They will not be a comparable employee if they are no longer employed by the hirer," the BIS said in guidance it has published (50-page /335KB PDF) to help hiring companies prepare for the new Regulations.

Companies should consult existing documents, such as pay scales, contracts or company handbooks, to make sure the agency worker gets what they are entitled to, BIS said.

The BIS guide says that an agency worker who refuses to do a suitable assignment is still entitled to four weeks' pay before dismissal. The guidance clarifies that the four weeks’ pay does not need to be paid if the agency worker resigns but does not deal with what happens if the agency worker resigns and claims constructive dismissal.

Contract companies that assign 'umbrella workers', or agency workers, to work for other businesses can include travel expenses within the pay that is compared to the staff member, the guidance said.

"Where an umbrella worker receives part of their pay as reimbursement for travel expenses and, for example, where a directly recruited worker or employee would receive £100 per day, the umbrella worker must still receive £100 a day but this can be made up of £80 plus £20 reimbursement of travel expenses," the BIS said.

Companies should be aware of the complex structure that can exist in the supply of agency workers eligible for equal rights, the BIS guide advised.

"An individual is not prevented from being an agency worker under the Regulations simply because they work through an intermediary body," the BIS said.

"It is important that the correct information from the hirer is shared between parties in the chain of supply of the individual agency worker in order to ensure that whoever actually pays the agency worker is aware of their entitlement," BIS said.

Temporary workers who put their earnings through a limited company do not lose their right to equal treatment on working and employment conditions, BIS said.

"Where the relationship between the individual, temporary work agency and hirer remains, in essence, a tripartite relationship, and a hirer is not a client or customer of such individuals, they are likely to be in scope [for equal treatment under the new regulations]," BIS said.

Companies that have a managed service contract with another firm, such as to supply a cleaning or catering service, can still be responsible for observing agency workers' rights, BIS said.

"The managed service contractor, not the customer, has responsibility for managing and delivering the catering or cleaning service rather than just supplying the staff.

The Managed Service Contractor must be genuinely engaged in supervising and directing its workers on site on a day to day basis and must determine how and when the work is done. If it is the customer that determines how the work is done, then it is more likely that the agency workers will be covered by the Regulations," the BIS guide said.
 
"Merely having an on-site presence (e.g. a named supervisor) would not necessarily mean that there is a Managed Service Contract. Conversely, where the customer has some responsibilities for all workers on site, for example health and safety responsibilities, this would not in itself mean that this was not a Managed Service Contract," the guide said.

The BIS guide says companies that employ temporary workers directly will probably not have to ensure the workers' equal rights. This marks a change from the BIS' draft guide, published in April, which said that they were not covered by the new regulations.

"They are unlikely to be in scope where a company employs its temporary workers directly and they are only supplied to work for that same business," the BIS guide said.

BIS recommends that the agency that supplies temporary staff record details about the new vacancy and notify the worker if their role has "substantively changed." The draft publication issued in April from BIS implied that this was a requirement for agency worker suppliers under the new regulations.

"It is not enough that a line manager has changed but not the job requirements or that the agency worker has transferred between similar administrative functions or has moved within a single, relatively small business unit or has been given a different pay rate. None of these things by themselves would be sufficient. There has to be a genuine and real difference to the role," BIS said.

BIS said that the 12 week qualifying period that agency workers will have to successfully complete before being eligible for the equal rights can be stopped or paused. It said that the 'qualifying clock' will be reset to zero when an agency worker starts work with another company, moves to a new role within the same company or there is a break between assignments with the same company of more than six weeks, the guidance said.

Accrual of weeks within a temporary workers' qualifying period will pause when the worker does not work for a company for a period under six weeks long, the worker is incapacitated from work or on jury duty for up to 28 weeks, or the worker is on holiday, BIS said.

A pause also occurs when the workplace closes for a planned shutdown, such as Christmas, or the worker is not able to work because of industrial action at the company, BIS said.

The qualifying period will continue to accrue when a worker takes a break from work due to pregnancy or childbirth within 26 weeks of their child being born, BIS said. Maternity leave breaks, adoption leave or paternity leave also count towards the workers' qualifying period, the guidance said.

Agency workers' rights are not retrospective so for agency workers employed on 1 October 2011 their 12 week qualifying period will start from then, the Regulations say.

The Regulations say employers must give agency workers access to facilities from the first day they are employed. BIS said that the facilities include the staff canteen and car parking, even when the facilities are not on-site, but said that companies did not have to offer 'enhanced' access rights to some benefits permanent staff receive.

"For example, where membership to a crèche involves joining a waiting list, the agency workers would also be able to join the list and would not be given an automatic right to have a crèche place. Nor is it about access to off-site facilities and amenities which are not provided by the hirer, such as subsidised access to an off-site gym," the BIS said.

BIS suggested that employers provide new temporary staff with an induction pack that includes information about where they can find details about internal job vacancies. The new regulations require this information to be available to staff from their first day in the job.

"This right will not apply in the context of a genuine ‘headcount freeze’ where posts are ring fenced for redeployment purposes or internal moves which are a matter of restructuring and redeploying existing internal staff in order to prevent a redundancy situation," the BIS guide said.

An agency worker is "someone who has a contract with the temporary work agency", such as an employment contract or agreement to provide services personally, "but works temporarily for an under the direction and supervision of a hirer," the BIS guide said.

"The definition of an agency worker excludes those who are in a "profession or business undertaking carried out by the individual" where the hirer is a client of customer of the individual (i.e. a genuine business to business relationship). It is still possible for someone in a profession or in a business to be an agency worker if there is no such client or customer relationship," the guide said.

BIS will publish a guide to the Regulations from an agency workers' perspective shortly.