1. Discussion notes Employment law: Are you up to date? Office Angels July 2011 01
ARE YOU UP TO
DATE?
2011 EMPLOYMENT LAW:
ARE YOU UP TO DATE? About our presenter
With the implementation of the Equality Act, the abolition of Andy Smith is the Head of
the default retirement age, changes to maternity and paternity Regulation and Employment
rights, and the introduction of the Agency Workers Regulations for the Adecco Group UK
(AWR), the UK employment landscape is undergoing and Ireland, responsible for
considerable change. coordinating the Adecco
Group’s response to legislative
With a pressing responsibility on businesses to understand developments. A key focus of
and implement these new laws, Office Angels recently hosted this has been the UK’s recent
a number of informative webinars to help HR professionals implementation of the EU
plan for the wider business implications that such changes Agency Workers Directive.
are likely to prompt.
Andy has been employed by
The session – presented by Andy Smith, Head of Regulation the Adecco Group for over 20
and Employment for Adecco Group UK and Ireland – offered years; performing a number of
vital information on the latest legislation, whilst providing the valuable functions within the
group with an opportunity to pose questions, share Group’s Legal and HR teams.
approaches, and voice concerns. He is a member of the CIPD
and has an LL.M (with
distinction) in employment
About our webinars law from Middlesex University.
An important part of our role is to share our knowledge and
expertise with our network of valued clients. These webinars
are a reflection of our promise to add value to your
organisation, by really getting to the heart of the issues
affecting your business.
The Office Angels webinars took place on
11, 12 and 18 May 2011.

2. Discussion notes Employment law: Are you up to date? Office Angels July 2011 02
Overview If an internal vacancy is open to employees of the
Despite the government’s commitment to deregulation, HR organisation only, are we now required to allow agency
professionals are being kept increasingly busy this year; and workers to apply, and can we still say ‘internal applicants
with a steady pace of legislative change on the horizon, the only’?
next six months are going to be key for British employers. The Regulations don’t give agency workers an automatic right
to apply for internal vacancies, but rather a right to expect
The webinars focused on the four most important business
information on vacancies.
issues, as voted for by attendees:
The intention of the directive is to give agency workers the
- Agency Workers Regulations (46%)
same opportunity to access permanent work as direct
- Equality Act (32%) employees. It is no longer permissible to state ‘internal
applicants only’, as agency workers must now be considered
- Abolition of the default retirement age (14%) as internal applicants. Some companies will have their own
eligibility criterion and the Regulations will not affect them.
- Additional paternity leave (8%)
Is the onus to provide information about vacancies on the
agency or the organisation?
To provide clarity around key issues – and to help delegates
It is exclusively the responsibility of the organisation (‘hirer’),
understand how the Regulations are likely to affect their
as only the hirer can be liable for any failure to adhere to the
business – attendees were encouraged to pose questions
Regulations. If temporary workers apply for vacancies and are
and prompt discussion during each of the webinars:
successful, will the agencies still charge an introduction fee?
The Regulations will not impact the current law that sets out
Agency Workers Regulations 2010 the circumstances under which agencies can charge a fee for
the introduction of candidates for permanent employment.
In order to comply with the 2008 EU Directive, new laws
surrounding the equal treatment of agency workers will come
What is the difference between the AWR and the IR35?
into effect across the UK on 1 October 2011.
If an individual works under the umbrella of their own limited
With many of our clients relying on a temporary workforce, company – and they are compliant with the HMRC test of
the Agency Workers Regulations (AWR) are presenting a real self-employment as set out in the IR35 – they will fall outside
challenge. From the discussions that we’ve had with our of the scope of the AWR, as they are genuinely self-employed,
clients however, it’s clear that while many feel confused by rather than agency workers.
and concerned over the impending changes, those in receipt
of the full facts feel the challenge to be a manageable one. We don’t foresee a mass rush towards limited company
Indeed, the impact of the new legislation can be significantly working as a means to avoid the Regulations, because
mitigated before it comes into effect - providing employers if the individuals that stand to be affected could have
act now. operated outside of the tax regime for a limited company,
most would have done so already. If the nature of an
individual’s work is such that they can’t opt out of the
income tax – which is generally what limited company working
involves – there is unlikely to be any disruption
to the proportion of agency workers.

3. Discussion notes Employment law: Are you up to date? Office Angels July 2011 03
Does it differ for freelancers who are sole contractors (don’t If the need for the agency worker no longer exists, and they
have a limited company) and are invoicing for themselves? have been with the firm for more than 12 weeks, can their
contract be terminated?
Under existing tax law, sole traders that find work through
agencies would have to be treated as employees and must Yes. The AWR will not impose restrictions if their services are
have tax deducted under PAYE. For this reason, they are not no longer required.
generally supplied by agencies.
Will notice periods be in line with an organisation’s policy or
If permanent members of staff are given a pay increase, will with what is agreed with the agency?
an agency worker qualify for the same increase if they have Equal treatment does not extend to notice periods.
been in an assignment for longer than 12 weeks?
If an agency worker has been in their post for a significant Every company’s holidays are different, so how will agencies
amount of time – and they would have been entitled to a manage AWR?
pay increment if they had been recruited directly by the
The Regulations aren’t specific in terms of equal treatment in
organisation – then the rise in salary should apply to the
relation to holidays. We anticipate that the most common
agency worker as well. It’s vital that agencies and hirers
response is going to be to adjust the rate by which agencies
maintain regular contact so that both parties are aware
currently charge clients for the accrual of annual leave
when such changes are taking place, so as to ensure
entitlement. For example, if the current charge is based on 28
equal treatment.
days, but equal treatment confers the right to 33, the simplest
method is to change the accrual rate. Alternatively, the value
Can an agency worker’s contract be terminated on health of the additional holiday pay can be added to the agency
grounds for sickness that is termed a “disability”? worker’s hourly rate.
The Regulations are not relevant in this case; there is
however an existing law which provides protection against If an agency worker has passed the 12-week qualifying
discrimination on the grounds of disability. period, are they entitled to annual leave and will the hirer be
expected to pay for any days taken as holiday?
In order to comply with the equal treatment of agency work- Holiday entitlement is covered by the right to equal treatment
ers, should they be given access to such benefits as childcare – subject to the constraint that equal treatment relates to the
vouchers, where the saving is made through payroll? terms and conditions that would have applied if the same
Vouchers that are linked to salary sacrifice schemes are out of worker had been employed directly by the client. The cost of
scope of the Regulations. holiday pay is generally built into the agency’s hourly charge,
but the new legislation says nothing about who should fund it.
Do agency workers qualify for healthcare or pensions after the
12-week qualifying period? Do agency workers have to use up all of their annual leave
Health insurance is not covered under the new legislation. entitlement, or can remaining days be converted into pay?
Pensions are expressly excluded from the definition of pay – Any excess over and above the statutory minimum could be
whether as an alternative benefit, or as a contribution towards converted into pay. The Regulations say nothing about how
employee pension entitlements. or when this might be agreed
If direct employees are provided with a parking permit free If an agency worker is paid more than direct employees, and
of charge, will agency workers be entitled to the same permit the over payment is enough to cover any extra holiday that the
after 3 months? agency worker might be entitled to, would they still have to be
Equal treatment would not extend to a requirement for the paid for holiday on top of this?
hirer to pay for off-site parking; it only covers facilities and The Regulations do not provide for any offset; it’s a term-by-
amenities provided by the client and operated by the client. term right.

4. Discussion notes Employment law: Are you up to date? Office Angels July 2011 04
What happens if an organisation changes its agency worker Phasing out the default retirement age
every 12 weeks?
What does the abolition of the default retirement age mean
The Regulations make specific provisions to prevent abuse of for UK businesses?
the qualifying period by manipulating patterns of assignment;
this however only applies where an agency worker is engaged Most employers will no longer have the option to dismiss
on two or more assignments, and the gap between two employees simply because they reach a certain age, without
assignments is longer than six weeks. facing consequences of age discrimination; such as unfair
dismissal claims.
Will the new legislation affect the rate that an organisation is
charged by its agency for the provision of the temporary staff? Our company life assurance does not cover any employee
over the age of 65. Do we have to amend this policy?
The Regulations say nothing about agency charges, but where
a statutory change in the law results in an increase in the Group risk insured benefits are exempt from the principle of
agency’s cost – and if an increase in pay is made to an equal treatment.
agency worker in order to comply with equal treatment –
the cost is likely to be passed by the agency to the client.
Additional paternity leave and pay
After an agency worker has completed their 12-week Who qualifies for additional paternity leave?
qualifying period and returns after a break of more than 6 The granting of an additional 26 weeks paternity leave applies
weeks, would they be entitled to equal treatment automati- to biological fathers or the person responsible for the child’s
cally, or would they start from 0 weeks again? care. The right only applies if the mother returns to work; and
If the gap between assignments amounts to more than 6 it can be begun no earlier than 20 weeks before the birth of
weeks, this resets the qualification clock; meaning that the the child to be cared for.
agency worker would have to re-qualify for equal treatment.
How does this affect statutory paternity pay?
Equality Act 2011 Separate provision applies to additional statutory paternity
pay: if the mother returns to work with the balance – or some
What is different about the new Equality Act that differs from parts of the balance – of the 39 weeks of statutory maternity
existing laws? pay, then that can transfer and be taken by the father.
In April 2011, a specific provision of the Equality Act came
into effect, stating that under certain limited circumstances, Do you anticipate that many fathers will take advantage
employers can choose to employ or promote an individual of this new law?
because that individual possesses a ‘protected characteristic’ The previous government didn’t expect this to have a
as defined by the Equality Act, such as sex or race. particularly high take up, and believed it would start at
between 4% and 8%. Recent developments from the
How is ‘proportionate’ discrimination determined? current government suggest that they might be looking at
As this is a new law, there is no definitive answer because something more radical to build on this going forward;
there is yet to be any tribunal or court rulings on what perhaps with a view to introducing a more flexible regime.
‘proportionate’ means in this context.
Can you suggest a way that employers can verify that
the mother has indeed returned to work?
The system is based on ‘self certification’.
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