The Government has recently published a consultation paper and draft regulations to implement the EU Agency Workers Directive.  This follows an earlier consultation on the policy considerations and it is therefore likely that the draft Regulations are close to their final form.

Who will be covered?

The Regulations will apply to people finding temporary work through a ‘temporary work agency’, based upon the existing concept of an Employment Business.  The Regulations will not extend to those finding permanent work through an Employment Agency.

The definition of ‘agency worker’ will exclude workers who are genuinely (i) self-employed (ii) working through their own limited liability company, or (iii)  employed on ‘Managed Service Contracts’.  However the definition will include agency workers contracted to an ‘umbrella company’, or who operate a personal service company but are not genuinely self-employed, or who are supplied through intermediaries.

What will be covered?

Temporary agency workers will be entitled to equal treatment in comparison to permanent workers with regards to basic working and employment conditions.  However, a derogation agreed last last year with the  TUC and CBI,  means that this will only apply once a worker has completed a 12 week qualifying period.

The ‘basic working and employment conditions’ will be those that ‘apply generally’ in the workplace - i.e. those terms and conditions that are ordinarily incorporated into the hirer’s contracts of employment, whether by collective agreement or otherwise.

This will include:

• holiday entitlement;
• pay (i.e. basic pay plus other contractual entitlements directly linked to the work undertaken by the agency worker whilst on an assignment)
• overtime
• breaks
• rest periods
• night work
• paid time off for ante-natal appointments
• the right to be provided with alternative work by the agency, or pay if this is not possible, if an assignment has to be ended on on maternity grounds

But will exclude:

• certain bonus payments (e.g. those based on organisational performance or linked to a performance appraisal process)
• financial participation schemes (e.g. share options and profit sharing)
• occupational pensions
• occupational sick pay
• benefits in kind (e.g. company car allowances or health insurance)
• contractual notice and contractual redundancy pay

 Agency workers will be entitled to some rights from day 1 of any assignment.  These include:

• equal access to facilities (e.g. childcare and transport services)
• improved access to training
• information about permanent vacancies with the hirer

Who will be liable?

The agency will bear primary responsibility for any breach in relation to equal treatment related to basic working and employment conditions, but will have a defence if they have taken ‘reasonable steps’ to obtain the necessary information from the hirer and acted reasonably in determining the workers conditions.  The hirer will be solely responsible for any liability in relation to access to facilities.

‘Temp to Perm’ fees

Under the current Agency Regulations employment businesses can charge a ‘transfer fee’ to hiring companies under certain circumstances where the company wishes to directly employ the worker provided they offer an extended period of hire as an alternative to the transfer fee.  The draft Regulations will introduce an express reasonableness test for both the fee and the extended period of hire.

It is intended that the Regulations will not come into force until October 2011 as the Government recognise that they will ‘entail some potentially significant changes in practice for hirers and agencies, who will need time to prepare’.  Should you wish to comment on the proposals or view further details the consultation paper can be found here.

Posted: October 19th, 2009 under Employment/HR.
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