Temps have rights now too you know

The Agency Workers Regulations become law this year. Christopher Syder and James Pike explain what they mean for construction firms.

As some construction businesses begin to see an upturn in demand, many are turning to temporary agency workers as a way of dealing with new work, without having to commit to recruiting permanent employees.

The Agency Workers Regulations 2010, which come into force in October, will give these agency workers many of the same rights as full-time workers.

The regulations do not apply to the genuinely self employed. Unfortunately this means that those in sham self-employment arrangements are likely to be treated as outside the scope of the new regulations and so not benefit from their rights under it. Unions are therefore warning that if the government doesn’t do more to tackle sham self-employment the regulations will be undermined as more employers and agencies encourage temporary workers to go down this route.

The introduction of the regulations is thus both important for the industry in that it grants new rights to agency workers and because it is also likely to increase the focus of construction unions in exposing situations where agencies and employers are using sham self-employment as a loophole to bypass their new responsibilities.

Day one rights

From the first day of an assignment, agency workers will be entitled to access collective facilities and amenities available to a hirer’s comparable full time staff, such as car parking or staff canteen. They will also be entitled to receive information about job vacancies.

When they have completed 12 weeks on assignment in the same role, an agency worker will be entitled to the same basic working terms and conditions as the hirer’s comparable full-time staff. This includes conditions relating to pay (including some bonuses, shift allowances or overtime payments) and annual leave.

The new regulations state that each employment term will be considered individually, so an agency worker receiving more basic pay than their comparator does not mean they are not entitled to equality of terms elsewhere. This means that agency workers will be entitled to the same level of shift allowance received by a comparable worker, irrespective of whether their daily rate of pay is more than that worker.

In monitoring 12 weeks’ service, if an agency worker finishes an assignment with a hirer and starts a new assignment (undertaking the same role) with a break of less than six weeks in between, then this simply suspends continuity and service during the previous assignment will count towards their 12 weeks.

Penalties

If an agency worker pursues a claim in relation to their day one rights, it could result in compensation being awarded, for which the hirer will be solely liable. The level of compensation will be whatever an employment tribunal considers “just and equitable” in the circumstances, which is likely to relate to any financial loss suffered by the worker.

Liability for claims relating to breaching the right to equal treatment will rest with either the temporary worker agency (TWA) and/or the hirer. However, the TWA has a defence if it can demonstrate it took reasonable steps to obtain information from the hirer about its basic working and employment conditions.

The regulations contain anti-avoidance provisions to prevent hirers and/or TWAs from structuring assignments in such a way as to prevent agency workers from acquiring the right to equal treatment. If an employment tribunal considers this to have happened, it can determine that the agency worker has acquired the right to equal treatment and impose a fine on the hirer and/or the TWA of up to £5,000.

Potential exemption

The new regulations also provide a potential exemption from the right to equal treatment in relation to pay. This applies where the TWA engages an agency worker on a permanent contract of employment and pays them a minimum sum between assignments. This is known as the Swedish Derogation Model and the exemption means the hirer does not have to worry about equality of basic working terms and conditions and the need to disclose information about internal pay rates to the TWA.

However, it is important to recognise that this only means that agency workers will not be entitled to equality of pay. They are still entitled to day one rights and the other elements of the right to equal treatment when they have completed 12 weeks’ service.

Companies engaging temporary workers should therefore undertake an impact assessment to determine the extent to which their operations will be affected by the regulations. This includes identifying how many agency workers are used; the average length of assignment; and what pay and conditions they receive.

In addition, firms should be check their terms and conditions with TWAs to check if these need to be revisited to ensure compliance with the new regulations. 

Christopher Syder is a partner and head of employment and James Pike is an associate at law firm Davies Arnold Cooper