Many thanks to all the blog's readers over the past months. I won't be adding any more posts for the rest of 2010, but will be resuming in the first week of January.
In the meantime, I hope you have a good Christmas / New Year break, and here's to 2011.
AGENCY WORKERS REGULATIONS 2010
The Agency Workers Regulations 2010 will come into force in the UK on 1 October 2011. It is easy to think that this can be dealt with nearer the time, but anyone dealing with agency workers would be well advised to start planning now. In this article Rebecca Seeley Harris of Re: Legal Consulting Ltd discusses the implications of the Regulations.
The Regulations have been implemented on the basis of the CBI/TUC agreement of May 2008 that after 12 weeks in a given job an agency worker will be an entitlement to basic employment rights and equal treatment.
The Regulations seeks to protect vulnerable temporary agency workers by giving them basic employment rights and equal treatment after 12 continuous calendar weeks working for the hirer. The key objectives are to achieve protection for temporary agency workers whilst at the same time allowing flexibility in the labour market.
It was announced recently by the Government that they will not be making any changes to the Regulations, despite speculation that they might. The Regulations will, therefore, become effective from 1 October 2011 in their existing form. The Government are now busy setting out industry guidance, but this will apparently not be available in its final form until June 2011. Although the guidance will shed some light on the rather complex arrangements, it does not have any legal standing as such. As with any new piece of legislation, the more complex grey issues will undoubtedly require litigation to provide clarification.
Responsibilities of the agency and hirer
In the meantime, what is already certain is that the Regulations will have a major impact on all parties in the recruitment agency process. Both the recruitment agency and the hirer have liability for breaches of the legislation, to the extent that they are responsible or to blame for the breach or infringement.
The Regulations also apply to agency workers supplied via intermediaries, this is to ensure that agency workers supplied through Master or Neutral Vendor or other ‘chain’ arrangements including umbrella companies are covered. The definitions used also ensure coverage for employees and workers on zero hours contracts.
The Regulations do provide the so called “Swedish Derogation” which exempts the agency from complying with the Regulations, but only as they relate to pay. To take advantage of the derogation the agency worker must, amongst other conditions, have a permanent contract of employment with the agency and must be paid between assignments at a minimum rate. The contract must also have been entered into prior to the beginning of the first assignment.
Rights of the temporary agency worker
A temporary agency worker is defined as an individual who is supplied by a temporary work agency to work temporarily for and under the supervision and direction of the hirer. Under the Regulations the agency worker can benefit from basic employment rights and equal treatment after the qualifying period of 12 continuous calendar weeks working for the hirer. This does not mean, however, that they become a permanent employee but, it entitles the worker to equal treatment to that of a comparable employee during the currency of the contract or assignment.
The Regulations do not apply to those individuals who are providing their services to the agency or the hirer as an independent contractor carrying on a business undertaking. There is no actual ‘opt-out’ or exemption for limited company contractors or the genuinely self-employed, so establishing whether they are in fact running a business, will be determined by the employment status case law. The Regulations, however, will only come into play if the agency worker takes the matter to the employment tribunal, and the complaint has to be presented within three months of the alleged infringement of a right conferred by the Regulations.
Worker’s rights and equal treatment
The Regulations apply mainly to conditions regarding pay and equal treatment for the agency worker after the qualifying period of 12 weeks. The agency worker is entitled to the same basic working and employment conditions as a comparable employee or worker doing the same job for the hirer.
The agency worker will be entitled to the basic terms and conditions that are contained in a comparable employee’s employment contract. The relevant terms and conditions being those relating to pay, the duration of the working time, night work, rest periods, rest breaks and annual leave. Pay, in this respect, will include any fee, bonus, commission, holiday pay or other payments with reference to the employment, although certain payments are excluded.
The liability of the agency and hirer
In terms of liability, both the agency and the hirer are liable to the extent that they are responsible for the particular breach. Where the breach relates to basic working and employment conditions, the hirer will have sole liability if the agency has acted reasonably and taken reasonable steps to obtain the necessary information from the hirer, using the ‘reasonable steps’ defence. Both the agency and hirer are ‘equally responsible’ for their part in the act of unfair dismissal or subjecting the agency worker to a detriment.
In relation to equal treatment claims where the hirer is solely responsible (e.g. access to canteens, child care, etc) the agency will not be held liable because the agency have no role in delivering these entitlements.
Although the legislation sets out the liabilities, it does not address the issue of indemnity clauses. This would have been an unprecedented step for Government to take to intervene in private commercial arrangements to protect the commercial interests of a particular party. It does, however, leave the agency in a position where the client (the hirer) could include an indemnity in their terms and conditions, giving the agency sole liability in spite of the reasonable steps defence.
Although the Regulations do not come into force until October 2011, it is essential to start planning early. Any year long contracts signed now will need to address the issue regardless of whether the Government guidance has been given. Unlike previous legislation which has applied to the recruitment sector, these Regulations require that both parties take responsibility and particularly the hirer or end client.
Rebecca Seeley Harris
Re: Legal Consulting Ltd
Tel: +44 (0) 1392 876428
Email: rebecca@relegalconsulting.co.uk
Rebecca is a specialist legal consultant who specialises in the law relating to independent contractors and the non-standard workforce. Rebecca has over 10 years experience in dealing with issues such as IR35, employment status, the EAA Conduct Regulations, and other issues relating to contract or the recruitment or coaching industries.
The Regulations have been implemented on the basis of the CBI/TUC agreement of May 2008 that after 12 weeks in a given job an agency worker will be an entitlement to basic employment rights and equal treatment.
The Regulations seeks to protect vulnerable temporary agency workers by giving them basic employment rights and equal treatment after 12 continuous calendar weeks working for the hirer. The key objectives are to achieve protection for temporary agency workers whilst at the same time allowing flexibility in the labour market.
It was announced recently by the Government that they will not be making any changes to the Regulations, despite speculation that they might. The Regulations will, therefore, become effective from 1 October 2011 in their existing form. The Government are now busy setting out industry guidance, but this will apparently not be available in its final form until June 2011. Although the guidance will shed some light on the rather complex arrangements, it does not have any legal standing as such. As with any new piece of legislation, the more complex grey issues will undoubtedly require litigation to provide clarification.
Responsibilities of the agency and hirer
In the meantime, what is already certain is that the Regulations will have a major impact on all parties in the recruitment agency process. Both the recruitment agency and the hirer have liability for breaches of the legislation, to the extent that they are responsible or to blame for the breach or infringement.
The Regulations also apply to agency workers supplied via intermediaries, this is to ensure that agency workers supplied through Master or Neutral Vendor or other ‘chain’ arrangements including umbrella companies are covered. The definitions used also ensure coverage for employees and workers on zero hours contracts.
The Regulations do provide the so called “Swedish Derogation” which exempts the agency from complying with the Regulations, but only as they relate to pay. To take advantage of the derogation the agency worker must, amongst other conditions, have a permanent contract of employment with the agency and must be paid between assignments at a minimum rate. The contract must also have been entered into prior to the beginning of the first assignment.
Rights of the temporary agency worker
A temporary agency worker is defined as an individual who is supplied by a temporary work agency to work temporarily for and under the supervision and direction of the hirer. Under the Regulations the agency worker can benefit from basic employment rights and equal treatment after the qualifying period of 12 continuous calendar weeks working for the hirer. This does not mean, however, that they become a permanent employee but, it entitles the worker to equal treatment to that of a comparable employee during the currency of the contract or assignment.
The Regulations do not apply to those individuals who are providing their services to the agency or the hirer as an independent contractor carrying on a business undertaking. There is no actual ‘opt-out’ or exemption for limited company contractors or the genuinely self-employed, so establishing whether they are in fact running a business, will be determined by the employment status case law. The Regulations, however, will only come into play if the agency worker takes the matter to the employment tribunal, and the complaint has to be presented within three months of the alleged infringement of a right conferred by the Regulations.
Worker’s rights and equal treatment
The Regulations apply mainly to conditions regarding pay and equal treatment for the agency worker after the qualifying period of 12 weeks. The agency worker is entitled to the same basic working and employment conditions as a comparable employee or worker doing the same job for the hirer.
The agency worker will be entitled to the basic terms and conditions that are contained in a comparable employee’s employment contract. The relevant terms and conditions being those relating to pay, the duration of the working time, night work, rest periods, rest breaks and annual leave. Pay, in this respect, will include any fee, bonus, commission, holiday pay or other payments with reference to the employment, although certain payments are excluded.
The liability of the agency and hirer
In terms of liability, both the agency and the hirer are liable to the extent that they are responsible for the particular breach. Where the breach relates to basic working and employment conditions, the hirer will have sole liability if the agency has acted reasonably and taken reasonable steps to obtain the necessary information from the hirer, using the ‘reasonable steps’ defence. Both the agency and hirer are ‘equally responsible’ for their part in the act of unfair dismissal or subjecting the agency worker to a detriment.
In relation to equal treatment claims where the hirer is solely responsible (e.g. access to canteens, child care, etc) the agency will not be held liable because the agency have no role in delivering these entitlements.
Although the legislation sets out the liabilities, it does not address the issue of indemnity clauses. This would have been an unprecedented step for Government to take to intervene in private commercial arrangements to protect the commercial interests of a particular party. It does, however, leave the agency in a position where the client (the hirer) could include an indemnity in their terms and conditions, giving the agency sole liability in spite of the reasonable steps defence.
Although the Regulations do not come into force until October 2011, it is essential to start planning early. Any year long contracts signed now will need to address the issue regardless of whether the Government guidance has been given. Unlike previous legislation which has applied to the recruitment sector, these Regulations require that both parties take responsibility and particularly the hirer or end client.
Rebecca Seeley Harris
Re: Legal Consulting Ltd
Tel: +44 (0) 1392 876428
Email: rebecca@relegalconsulting.co.uk
Rebecca is a specialist legal consultant who specialises in the law relating to independent contractors and the non-standard workforce. Rebecca has over 10 years experience in dealing with issues such as IR35, employment status, the EAA Conduct Regulations, and other issues relating to contract or the recruitment or coaching industries.
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