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Agency Workers Regulations - what employers need to know

Published on Jan 22, 2010 |

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Following a lengthy consultation, the Government yesterday laid before Parliament its 'final word' on the Agency Workers Directive. The legislation will give agency temps a right to equal treatment with permanent employees after 12 weeks with the end user/hirer.

Partner at international law firm, Eversheds, Mark Hammerton has provided a helpful insight to some of the key areas surrounding the final Regulations:

Employers should prepare now for the AWD implementation

Whilst Autumn 2011 may appear some distance away, employers need to prepare now for the impact this legislation will have.

"Not only will the basic pay of temps who have worked with a hirer for more than 12 weeks have to be in line with their non-agency comparators (which includes both employees and workers), but bonuses (unless they are not directly attributable to work done) and other terms regarding working time, holidays and breaks will also have to be equalised.

Extra compliance costs

"In addition to the direct costs of implementation, of less immediate but still significant effect is the administrative burden of compliance. For instance, there are a number of potential 'trip wires' regarding the 12 week qualification period. For example, a worker such as that will continue to accrue rights under the Regulations where they are on certain types of leave and where they are supplied through more than one agency. The burden of complying on both agencies and employers is significant given the information which is required to adhere to the Regulations. The added administrative burden may even lead to the larger agencies gaining market share.

Employers should examine their staffing needs

"All employers that use agency workers will need to examine their staffing needs. The majority of agency assignments are already for periods of less than 12 weeks (45% are for longer) but, for those which exceed this period, the initial reaction of employers may be to decide to limit future assignments to less than 12 weeks. Other employers may seek to consolidate by moving to exclusive arrangements with larger agencies. Other alternatives may be to reduce reliance on agency workers by recruiting employees directly or perhaps creating an in-house 'bank' of casual staff. Other employers will simply expect their existing workforces to absorb the 'extra' work rather than hiring additional temporary workers.

Other aspects to be aware of

"However be warned as the Regulations also contain provisions for a £5k award to guard against 'anti-avoidance' tactics such as structuring arrangements (such as moving staff between different roles) to avoid the 12 week period and a 2 weeks pay minimum award for breach.

"The Government has decided not to regulate the level of temp to perm fees - having withdrawn a measure that those fees had to meet a reasonableness test."

"Essentially employers need to look now at their use of agency workers and decide how they will respond to the Regulations when they are introduced. They also should review their commercial terms with agencies to ensure they are protect the business and allocate risk appropriately."