Agency Worker Regulations: Where Are We Now

It is observed since quite some time that agency workers are increasingly becoming popular in the workplaces. A recent statistic from an ONS Labour Force Survey shows that presently in the UK there are approximately 865,000 agency workers, which is expected to elevate to one million by 2020. Agency Worker Regulations (AWR) is effective since 2011, but till date it is noticed there have been rare appellate cases regarding its provisions. Therefore, the very new judgement of London Underground v Amissah has provided a very friendly direction. During this time around, more such changes in legislation are taking place.

Through this article we will try to peep into and try to ponder upon the present scenario in this field.

Who can get Covered Under Agency Workers Regulations?

According to the practices followed, and regulations made, agency workers work for a brief time period under the direction and supervision of a hirer, who are mostly the client who is the end user in the chain too. Although, the employment agreement or work contract of agency workers will remain with the temporary work agency. These agency workers are also called simple agency or recruitment agency. Normally, agency workers get engaged by their hirer for a fixed time period or for some specific task.

The AWR definition does not define those workers who are openly working independently or are engaged in permanent jobs. The Employment Appeal Tribunal (EAT) through various feedback and understanding the entire scenario has concluded that AWR cannot be applicable to a group workers who are working with a single hirer for a time duration of 6 to 25 years as the work provisions in such cases are not temporary.

Agency Workers Rights

The objective of Agency Workers Rights (taken from the European Union law) is to protect the workers from any kind of exploitation. The workers who are seen as just temporary and treated poorly as a lower level workforce.

AWR has the provision to protect and provide specific rights to the agency workers that can be divided into two categories as:

• Rights that comes into effect on the day one of the engagement of agency workers with their hirers
• Rights that are not effective till the time qualifying time duration of 12 weeks is met.

Day one rights:

The day one rights is no less beneficial than the rights of the employees with by and large similar responsibilities given by the hirer concerning ability to avail the shared facilities and amenities. The facilities that are effective from day one are: canteens, transport service, car parking and childcare facilities. By any chance if in certain circumstances, if a lesser favourable facility is offered to some then that is justified properly, but here cost to the worker is not enough to make it justified.

To get similar opportunity as the comparable worker with the hiring firm to get a permanent employment, there is a right to relevant vacancy information which can be availed. The hirer or the hiring firm has the sole responsibility and also bears complete liability if any of the day one rights are broken.

Twelve Weeks Rights

Twelve Weeks Rights is similar employment conditions as direct recruits of the hiring firm. In this employment, the facilities include – salary, leaves and breaks, resting periods and paid leave for prenatal appointments. As suggested by the EAT a term-by-term approach should be implemented instead of package methods, while comparing terms and conditions. This concludes that a lesser beneficial tenure cannot be compensated by higher pay wages.

If there is any breach of terms and conditions or rights of the workers, then both the agency and the hirer are liable. Look for proper guidance on how to calculate and allocated the compensation.

If there is breach of workers rights, there is no way to justify it. But Agency Worker Rights do offer exemption in relation to salary (that also includes holiday payments). It is primarily known as "Swedish derogation". Only workers with permanent contract with the temporary work agency are eligible for the exemption, this also allows the workers to pay in the midst of works (this do have certain provisions). Businesses should take note that agency workers’ right to equality and decent conduct from their hirers and agencies in regard to period of rest and unpaid annual leave after succeeding the 12-week period does not get affected due to presence of such contracts.

Agency Workers Compensation, Liability and Apportionment

In the last couple of years, several agency workers complained that their right to equal treatment under the Agency Worker Rights provision has been broken on the basis they are been paid lesser comparable employees. Similar case happened in London Underground Ltd. v Amissah & Ors, when the hirer paid the amount to the agency to compensate the underpayment, but the money was not passed on to the claimant agency workers as by the time hearing of the case was complete, the agency shut down due to bankruptcy.

Later when “just and equitable” test was set out in the Agency Worker Regulations, the ET or the Employment Tribunal gave the final decision saying no compensation is pending from London Underground Ltd.’s side because that would have meant that they have compensated twice for the underpayments to workers.

Also Read: Eligibility to get a job in UK

The led to repeat appeal by the workers. Then EAT had overturned the previous decision for the same case and decided that the compensation should be repaid by the London Underground Ltd. as it was almost 50% liable for the breaching of agency workers’ right to equality. Therefore, though London Underground had already covered the underpayment to the agency and it was agency that failed to pass the amount to the workers, the EAT reached the conclusion that it would bot be justified and impartial for the agency workers to deprive them of the compensation. The final verdict was, since London Underground had engaged with the agency, it is their liability to bear the compensation of agency’s fraudulence and claimants should not suffer.

From the above case one can reach an understanding that there should be a clause in the agreement between the hirer and the agency that both should share the cost and appropriate indemnities. But in the above case, we have seen it would not have served the purpose as the agency had been liquidated.

Conclusion : Agency Worker Regulations

In the UK, the ‘Swedish derogation’ is not so popular with the worker rights groups and hence recently it is observed that it comes under continuous scrutiny. Following several evidences, the 2017 Taylor Review discovered that in the present work atmosphere, the agency workers were not getting the expected benefits of this derogation, as they are involved in long time contracts and hence, they don’t get gaps between works. There is a growing concern of the facts that Swedish derogation is abusive for the workers.

Several proposals have been made to ensure greater transparency and clarity in the regulation to benefit the agency workers and at the same time not confirm that hirer and agency do not suffer in the entire process. It has become a part of wider debate in the UK, in which agency workers and their rights are engaged in the move for change for casual workforce. It would in the best interest of the businesses that engage agency workers to hire casual workers, to maintain their agreements from time to time to meet the deal with the changing conditions.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.