The new Agency Workers Regulations - what do they mean?

At present, it is lawful to pay agency workers at a different rate to employees or workers of a “hirer” or end-user (and the agency workers have very few employment rights.  However, this is about to change when the new Agency Workers Regulations 2010 come into force on 1 October 2011. 

The Regulations have now been finalised, however, there are some aspects of the Regulations which are unclear. The Government has produced draft guidance on how they anticipate that the Regulations will/should work in practice and they have invited comments thereon.  It is unknown when the final version of the guidance will be released.   A copy of the draft guidance can be found here: http://www.bis.gov.uk/assets/biscore/employment-matters/docs/d/11-830-draft-agency-workers-guidance.pdf Agency workers will still not have any automatic right to other rights that are currently only available to employees (such as the rights of unfair dismissal, redundancy consultation and payments and family friendly rights), but the introduction of the Agency Workers Regulations will provide the workers with a degree of protection. 

The key provisions are to ensure:

• basic working and employment conditions that are no less favourable than if the agency worker had been recruited directly by the hirer;
• equal access for agency workers to facilities and permanent employment; and
• penalties for non-compliance by agencies and hirers.

The enhanced rights will only apply where the worker has been employed in the same job for more than 12 continuous calendar weeks, or in a series of assignments which are materially the same and there is an insufficient gap between the assignments. 

The Government has estimated that the cost to businesses in the UK will be £1,516 million (www.BIS.gov.uk).  While the direct cost falls on the agencies, these costs will almost certainly be passed on to hirers.  The fees cannot be passed on to the agency worker.Those who hire agency workers should consider the following options:

• Liaise with agencies and review agreements with them to get best deal; 
• Consider structuring some benefits etc. for permanent employees so that they do not fall within the definition of basic pay and conditions;
• Limit duration of assignments to under 12 weeks, with at least 6 week breaks (subject to the anti-avoidance provisions); 
• Stop using agency workers altogether – e.g. increase overtime for existing staff or recruit more permanent employees;
• Bring agency workers in-house; and
• Consider a policy for ensuring that agency workers have equal access to permanent employment, such as by general announcement.