The Agency Workers Regulations (AWR) provide temporary agency workers with the same basic employment and working conditions as if they had been recruited directly by the client, after completing a 12-week qualifying period in a particular role.
The AWR become law on 1st October 2011. You can read the official government guidance here.
In this concise guide, we explain what the AWR means, and how it applies to contractors.
What does ‘equal treatment’ mean in practice?
From the first day of an assignment, agency workers are entitled to access collective facilities and amenities provided by the hirer, such as:
Canteen or other similar facilities.
Childcare facilities.
Transport services (e.g., local pick-ups, car parking).
Information on job vacancies.
After 12 weeks in the same role with the same hirer, agency workers are entitled to the same basic working and employment conditions as comparable permanent employees, including:
Pay: This includes basic salary, overtime payments, shift allowances, and bonuses directly attributable to the quality or quantity of work done.
Working time: Including duration of working hours, night work, rest periods, and breaks.
Annual leave: Entitlement to paid holiday.
Some employment rights apply from day one
It’s important to note that certain benefits, such as occupational sick pay, company pension schemes, and financial participation schemes, apply from day one and are not impacted by the AWR.
These day-one rights include:
Full protection from any discriminative behaviour.
At least the National Minimum Wage (NMW).
A minimum of at least 5.6 weeks of holiday pay.
Statutory benefits such as sick pay and maternity/paternity pay.
Which contractors are included?
The AWR applies to individuals who have a contract with a temporary work agency (TWA) and are supplied to work temporarily under the supervision and direction of a hirer.
Umbrella Company Contractors
Workers employed by umbrella companies and supplied to hirers fall within the scope of the AWR.
Limited Company Contractors
Individuals working through their own limited companies (also known as Personal Service Companies or PSCs) may be outside the scope of the AWR if they are genuinely in business on their own account.
However, if the nature of the relationship is such that they are effectively working under the supervision and direction of the hirer, they may be considered agency workers under the AWR rules.
Determining whether an individual is an agency worker under the AWR depends on the specific circumstances of the working relationship.
Factors such as the degree of control and supervision by the hirer, the contractual arrangements in place, and the level of integration into the hirer’s business are considered.
Ultimately, employment tribunals and courts may be called upon to determine disputed cases.
Some professionals are also excluded from the AWR
Individuals typically certified by a professional body, such as accountants and lawyers, may also be excluded from the terms of the AWR. These professionals don’t usually work under their clients’ supervision, direction and control.
Recent Development – Swedish derogation model abolished
As of April 2020, the so-called Swedish Derogation – an arrangement that allowed agency workers to be employed on a permanent contract with the agency and therefore not receive equal pay – has been abolished.
This change means all agency workers are entitled to equal pay after 12 weeks, regardless of any prior contractual arrangements.
