The Agency Workers Regulations Jon Taylor 20 May 2011

1. Employment The Agency Workers Regulations Jon Taylor 20 May 2011 www.emwllp.com

2. Employment The Agency Workers Regulations 2010 • Due to come into force on 1 October 2011. • Certain aspects of the Regulations are supported by guidance • (published May 2011) • Apply to Great Britain www.emwllp.com

3. Employment Temporary work agency (regulation 4) • "A person engaged in the economic activity, public or private, whether or • not operating for profit, and whether or not carrying on such activity in • conjunction with others, of – • supplying individuals to work temporarily for and under the supervision • and direction of hirers; or • (b) paying for, or receiving or forwarding payment for, the services of • individuals who are supplied to work temporarily for and under the • supervision and direction of hirers." www.emwllp.com

4. Employment Temporary Work Agency (TWA) • Master vendor – where hirer appoints one agency to manage recruitment • process using second tier agencies as appropriate • Neutral vendor – hirer appoints a management company which does not • itself supply any labour but manages the overall process. • Umbrella company – employs the worker and then supplies through • another TWA or directly. • According to the guidance, umbrella companies and “master” or “neutral • vendors” fall within the definition of TWA. www.emwllp.com

5. Employment Agency worker (regulations 2 and 3) • Supplied by a temporary work agency • To work temporarily for and under the supervision and direction of a • hirer • Has a contract with the temporary work agency which is a contract of • employment with the agency or any other contract to perform work and • services personally for the agency (regulation 3(1)). • Being employed or otherwise engaged by an agency includes those circumstances in which a worker is supplied through one or more intermediary (regulation 3(3) to (5)). www.emwllp.com

6. Employment Agency Worker – out of scope? … those in business on their own account where the status of the hirer is that of a client or customer of a “profession or business undertaking” – genuine B2B relationship What about those who provide their services through a limited company to the hirer via a TWA? www.emwllp.com

7. Employment Managed Service Contracts (MSC) Unless the provider of the MSC is genuinely engaged in directing and supervising staff on site on a day to day basis the workers will be “in- scope”. Simply having a named supervisor on site will not be enough. www.emwllp.com

8. Employment Hirer (regulation 2) • “A person engaged in economic activity, public or private, whether or • not operating for profit, to whom individuals are supplied, to work • temporarily for and under the supervision and direction of that person" • Potential derogation for public vocational training and retraining • programmes www.emwllp.com

9. Employment The right to equal treatment (regulation 5) An agency worker (A) will be entitled to: "... the same basic working and employment conditions as A would have been entitled to for doing the same job had A been recruited by the hirer: (a) other than by using the services of a temporary work agency; and (b) at the time the qualifying period commenced This is deemed to be the case where A is working under the same relevant terms and conditions as a "comparable employee". www.emwllp.com

10. Employment Establishing equal treatment - the comparator • A and the comparator are comparable if, at the time when the alleged • breach of the right takes place, both are: • working for and under the supervision and direction of the hirer, and • engaged in the same or broadly similar work having regard, where • relevant, to whether they have a similar level of qualification and • skills, and • the comparator works or is based at the same establishment as A • If there is no local comparator, A can use a comparator who works or • is based at a different establishment. www.emwllp.com

11. Employment Do you actually need a comparator? The Guidance suggests not – it says that in “most cases equal treatment can be established by giving the same entitlements “as if” he/she had been recruited as an employee…” Perhaps difficult to work out the “as if” position without being able to identify a comparator. www.emwllp.com

12. Employment Scenarios Where there are no pay scales – ET will look at the rate for the employed staff in the same position. Where there are no pay scales or comparable permanent employees, the right to equal treatment doesn’t apply. www.emwllp.com

13. Employment Basic working and employment conditions • Pay • Duration of working time • Length of night work • Rest periods • Rest breaks • Annual leave www.emwllp.com

14. Employment Pay (regulation 6(2)) “Any sums payable to a worker of the hirer in connection with the worker's employment, including any fee, bonus, commission, holiday pay or other emolument referable to the employment, whether payable under contract or otherwise but excluding any payments or rewards [listed in regulation 6(3)]." www.emwllp.com

15. Employment Pay therefore includes • Basic pay • Holiday pay (and time off in relation to public and bank holidays) • Overtime pay • Shift allowances • Unsocial hours premiums or bonus • Additional payments for particularly difficult and dangerous duties • Bonuses linked to individual performance (for example, piece-work • bonus which is linked to output and those based on performance • appraisal arrangements) • Vouchers or stamps with a monetary value, such as luncheon and • transport vouchers www.emwllp.com

16. Employment Pay does not include • Profit share or share participation which reflect long-term performance • or reward loyalty) • Financial participation schemes (defined as distribution of shares, share • options and profit sharing) • Occupational sick pay • Occupational Pensions (but note the effect of Pensions Act 2008 from • 2012) • Contractual notice pay • Contractual redundancy pay • Benefits in kind such as company car allowances or health insurance www.emwllp.com

17. Employment Bonus schemes • Bonuses attributable to amount or quality of work (such as commissions • linked to sales) are in scope. • Bonuses based on the overall performance of the business (not on • individual performance) even where they are given to employees who • have been employed for a specific period of time are out of scope • Annual pay increments will be in scope www.emwllp.com

18. Employment The 12-week qualifying period • 12 calendar weeks • Requires an agency worker to undertake the same role • On one or more assignments • With the same hirer • For 12 continuous calendar weeks (regulation 7(2)) • Any week during the whole or part of which an agency worker is engaged on an assignment is counted as a calendar week (regulation 7(4)). www.emwllp.com

19. Employment The "same role" • Continuity will be broken if where "the work or duties that make up • the whole or the main part of that new role are substantively different • from the work or duties that made up the whole or main part of the • previous role" (regulation 7(3)(b)) • The worker would have to commence a new, separate assignment • with the hirer. They cannot simply be switched between roles in the • context of the same contract with the agency • The meaning of “substantive” is set out in guidance • Agencies will be required to provide a written description of the new • work the agency worker will be required to undertake www.emwllp.com

20. Employment What makes 2 roles substantively different? • Are different skills and competences used? • Is the pay rate different? • Is the work at a different location/cost centre? • Is the line manager different? • Are the working hours different? • Does the role require additional training? • Is the equipment used different? www.emwllp.com

21. Employment Anti-avoidance provisions (regulation 9) • This gives a worker the right to be treated as if they were entitled to equal treatment • if a structure of assignments develops, within either the hirer or between that hirer • and connected businesses. Factors to be considered: • The length of the assignments • The number of assignments with the hirer and, where applicable, hirers • connected to that hirer • The number of times the agency worker has worked in a new role with the hirer • and, where applicable, hirers connected to that hirer and whether or not the new • role was the "same role" • The period of any break between assignments with the hirer and, where applicable, • hirers connected to that hirer • Additional award of up to £5,000 to prevent abuse. www.emwllp.com

22. Employment Breaks during (or between) assignments (regulation 7) • A break of 6 calendar weeks, either during or between assignments, would be needed before it is necessary to re-start the time that counts towards the qualifying period (regulation 7(4) and (6)(a)) • Some absences will not count towards the qualifying period • Sickness absence of up to 28 weeks • Statutory or contractual time off or leave (other than maternity, • paternity or adoption leave for which specific provision has been made), • for example, annual leave • Jury service of up to 28 weeks • Custom and practice of the hirer • A strike, lock-out or other industrial action at the hirer's establishment www.emwllp.com

23. Employment Breaks during (or between) assignments • Some absences from work will count towards the qualifying period • Weeks during which a worker is absent for certain reasons related to • pregnancy, childbirth or maternity for a protected period of up to 26 • weeks after a woman has had her child • Weeks when the worker is absent on statutory or contractual maternity, • paternity or adoption leave (regulation 7(5), (6) and (8)(d)(i),(ii) or (iii)) www.emwllp.com

24. Employment The “Swedish Derogation” – cunning loophole or load of old meatballs? • The exemption only covers pay • Agency workers are entitled to all other aspects of equal treatment • (including the day 1 entitlements) • The conditions are strict www.emwllp.com

25. Employment “Derogation contracts” (regulation 10) • Conditions: • The agency worker has a permanent contract of employment with the • TWA • The contract was entered before the first assignment started and • includes written terms relating to the scale, rate or method of • calculating remuneration, expectations as to location, the type of work • and hours of work during any assignment (including the minimum, of • one or more, and the maximum number of hours a week) • The contract must contain a term making it clear that the worker has • no entitlement to equal pay • continued… www.emwllp.com

26. Employment “Derogation contracts” (regulation 10) • Conditions: • In periods between assignments, the agency pays the worker "the • minimum amount", takes reasonable steps to seek a suitable new • assignment for the worker and, if a suitable assignment is available, • gives them the option to be put forward to the hirer. The "minimum • amount" must be at least 50% of the worker's basic pay while on • assignment. However, it may not be less than the national minimum • wage. www.emwllp.com

27. Employment “Derogation contracts” (regulation 10) • Other issues • The terms and conditions in the contract must apply across assignments • The contract must be a permanent one (not a fixed term or “project” • contract) • What are “reasonable steps” to find a suitable assignment? • What is a “suitable assignment”? • Termination of the contract is subject to payment of the 4 weeks pay • unless it has been paid during the notice period www.emwllp.com

28. Employment Pregnant women and nursing mothers • Right to reasonable time off during working hours to attend ante-natal • appointments (a new section 55A of ERA 1996) • Right to be paid by the agency during such absence at the appropriate • hourly rate (a new section 56A of ERA 1996) subject to • Informing the hirer and the agency of the pregnancy, in writing if • requested and, • Where requested by the hirer and/or agency providing written evidence • of ante-natal appointments • Unreasonable refusal of time off or non-payment during her absence risks an ET claim (a new section 57AA of ERA 1996). www.emwllp.com

29. Employment Pregnant women and nursing mothers • Duty to make adjustments • Cessation of supply and appropriate alternative work • What if there is no appropriate alternative work? www.emwllp.com

30. Employment Employment vacancies (regulation 13) • Right to be told of relevant vacancies • Right subsists from start of the assignment • Must be given the same opportunity as a comparable worker to find • work with the hirer www.emwllp.com

31. Employment Employment vacancies – what do you need to do? • Notification by “a general announcement in a suitable place in the • hirer's establishment" will be sufficient (regulation 13(4)) • Does this obligation constrain the imposition of employer-specific • qualifications or experience? • What about internal transfers and hiring freezes? www.emwllp.com

32. Employment Access to onsite facilities (regulation 12) • Right to equal treatment as regards access to "collective facilities and amenities" which include, in particular: • - Canteen or other similar facilities • - Child care facilities • - Provision of transport services • Liability for failure to provide access will be on the hirer • Failure can be justified on objective grounds www.emwllp.com

33. Employment Thresholds for bodies representing workers Temporary agency workers count towards the following thresholds • 21-worker threshold in the statutory recognition and derecognition • procedures • 50-employee threshold in the Information and Consultation of Employees • Regulations 2004 • 150 and 1000-employee thresholds used in defining a Community-scale • undertaking and group of undertakings in the Transnational Information • and Consultation of Employees Regulations 1999 • continued… www.emwllp.com

34. Employment Thresholds for bodies representing workers Temporary agency workers count towards the following thresholds • 50-employee threshold above which the involvement rights for • employees under the European Co-operative Society (Involvement of • Employees) Regulations 2006 apply • The threshold of one-third of employees of merging companies requiring • worker participation under the Companies (Cross-Border Mergers) • Regulations 2007, and the 500-employee threshold for a large company, • where provision is required for employee participation under those • regulations www.emwllp.com

35. Employment Liability for equal treatment (regulation 14) • The Agency is responsible for any breaches of rights in relation to • agency workers' basic working and employment conditions to the • extent that it is responsible for the infringement (regulation 14(1)) • “Reasonable Steps” defence • The hirer is responsible for any breach to the extent that it is • responsible for the infringement, having regard to the steps it has • taken to enable the agency to provide information to the agency • worker • No joint and several liability www.emwllp.com

36. Employment Information on equal treatment for workers (regulation 16) • Right to a written statement within 28 days of a written request to • their temporary work agency setting out • Relevant information relating to the hirer's basic working and • employment conditions • Factors the temporary work agency considered when determining • the basic working and employment conditions which apply to the • agency worker following the qualifying period • Information which explains the basis on which it is considered that • a person is a comparable employee; and the basic working and • employment conditions in force at the hirer that apply to that • employee www.emwllp.com

37. Employment Information on equal treatment for workers (regulation 16) • If the worker has not been provided with statement within 30 days of making the request, he can seek the information from the hirer • The hirer must provide the information in writing within 28 days of a • written request (regulation 16(4)) • Failure to respond entitles tribunal to draw adverse inferences • Similar rights to information for infringement of right of access to employment and collective facilities or training www.emwllp.com

38. Employment Enforcement • Tribunal claims for breach of the rights to: • Equal treatment after the 12-week qualifying period • Access to employment and collective facilities • Not be subjected to detriment (regulation 18(2)) • Provision of information under regulation 20 (regulation 15(2)(b)) www.emwllp.com

39. Employment Enforcement - time limits • 3 months from the date of the infringement or detriment • “Just and equitable" to do so (regulation 18(4)) • Eligible for pre- and post-claim ACAS conciliation www.emwllp.com

40. Employment Enforcement – Remedies • Declaration • Compensation ("just and equitable") • Recommendations for action to be taken www.emwllp.com

41. Employment The Agency Workers Regulations Jon Taylor 20 May 2011 www.emwllp.com