Blake Lapthorn Agency Workers Regulations seminar for end users on Thursday 8 September 2011.

1. The Agency Workers Regulations
Are you ready for 1 October 2011?
Seminar for end users
8 September 2011
Bridget Wood, Head of Recruitment sector group
bridget.wood@bllaw.co.uk
020 7814 5426
Stephanie Slanickova, Senior solicitor
stephanie.slanickova@bllaw.co.uk
020 7814 5422

2. Overview
Introduction
Who is an “agency worker” and what is a “temporary work
agency”?
Who falls within the scope of the Regulations and who falls
outside?
What are the new rights of “agency workers”?
Who is liable for breaches of the Regulations and what are the
penalties?
Possible workarounds
Implications for end users
New information to be supplied to workplace representatives
Implications for recruiters and other suppliers
Practical tips for staying ahead
Conclusions
Any questions

3. Introduction
Part-time workers and fixed-term employees already have equal
treatment rights under UK Regulations which implement EU
Directives
The aim of the European Agency Workers Directive was to
extend this principle to agency workers
The Agency Workers Directive became European law in
December 2008
UK to implement within three years

4. Introduction
The Agency Workers Regulations 2010 were laid before
Parliament on 21 January 2010
The Agency Workers (Amendment) Regulations 2011 were laid
before Parliament on 3 August 2011
BIS published revised final guidance on the Regulations on 27
May 2011 - additional guidance for teaching agencies published
in August 2011
The BIS Guidance provides important clarification of the
Regulations but is not a statement of the law – ultimately for
courts to interpret

5. Introduction
The Agency Workers Regulations give agency workers the right
to equal treatment with regards to “basic working and
employment conditions” once they have completed a 12 week
qualifying period – to be provided by “temporary work agencies”
“Day 1” rights to be provided by end users
The Regulations come into force on 1 October 2011

6. The Agency Workers Regulations 2010:
what the Regulations say
Who is an “agency worker” and what is a "temporary work
agency“?
Who falls within the scope of the Regulations and who falls
outside?
What are the new rights of agency workers?
Who is liable for breaches of the Regulations and what are the
penalties?

7. Who is an “agency worker”?
An agency worker:
– is supplied by a “temporary work agency”
– to work temporarily for and under the supervision and
direction of the client/end user (Regulations use term “hirer”
for client/end user)
AND
– has a contract of employment with the temporary work
agency or any other contract with the agency to perform
work or services personally (n.b. new definition)

8. What is a “temporary work agency”?
A temporary work agency:
– supplies individuals to work temporarily for and under the
supervision and direction of hirers/clients
OR
– pays for, or receives or forwards payment for, the services of
individuals who are supplied to work temporarily for and
under the supervision and direction of hirers/clients
Worker can be an “agency worker” even if he or she works
through an intermediary
Agency workers cannot contract out or “opt out” of the
Regulations

9. Who falls within the scope of the
Regulations? (examples)
Hirers (= clients/end users)
Recruitment agencies which supply individuals to work
temporarily for and under the supervision and direction of clients
Organisations which pay for or receive or forward payment for
the services of those individuals
Individuals supplied per supply model above
Intermediaries (and their workers/employees), such as umbrella
companies, master vendors and neutral vendors

10. Who falls outside of the scope of the
Regulations? (examples)
Individuals who find direct employment with the client
Agencies when they provide direct employment services
(permanent and/or fixed term)
In-house temporary staffing banks
Secondment arrangements

11. Who falls outside of the scope of the
Regulations? (examples)
Genuinely self-employed where the status of the hirer/client or
the agency is that of a client or customer of a profession or
business undertaking carried on by the individual, e.g. solicitors,
locum doctors, company contractors (nb not automatic)
Service providers engaged on “managed service contracts” are
excluded as are the individuals working on those managed
service contracts (eg IT, catering services)
Dispute as to who is within or outside scope? Ultimately
Employment Tribunals will decide

12. What new rights will agency workers have?
IMPORTANT:
The new rights under the Regulations are in addition to existing
rights, e.g. equality laws, data protection, National Minimum
Wage, Working Time Regulations

13. What new rights will agency workers have?
Rights
After 12 weeks
Day 1 (can be restarted/
paused/continued)
Collective Facilities
Access to Vacancies Equal Treatment
and Amenities

14. Day 1 rights
“Day 1” rights to be provided by the client (not subject to the 12
week qualifying period – i.e. from the first day of any assignment
which begins on or after 1 October 2011)
Agency worker has the right to be told of any relevant vacancies
with the client during their assignment in order to be given the
same opportunity as a comparable employee or worker to find
permanent employment with the client
Entitlement to notice of client’s permanent vacancies
– agency workers should know where and how to access
vacancies, e.g. notice board, intranet, induction packs
– no requirement to advertise staff re-deployment roles in
redundancy or restructuring situation
– BIS Guidance: clients are not constrained regarding
requirements for qualifications or experience

15. Day 1 rights
Access to client’s “collective facilities and amenities” (unless
less favourable treatment is justified on objective grounds)
– canteen or other similar facilities
– childcare facilities
– transport services – for example, local pick-up service,
transport between sites
– workplace crèche
– toilet/shower facilities
– staff common room
– waiting room

16. Day 1 rights
Access to client’s “collective facilities and amenities” (continued)
– mother and baby room
– prayer room
– food and drinks machines
– car parking
N.b. list above is non-exhaustive, no enhanced rights, excludes
benefits to reward long-term service or loyalty
Treatment must be no less favourable than comparable
employee or worker directly employed or engaged by client

17. Day 1 rights
Access to client’s “collective facilities and amenities” (continued)
– Less favourable treatment may be “objectively justified”
– Unlikely that cost alone will be enough
– Practical and organisational considerations
– Consider offering access to facilities and amenities on a pro
rata basis as an alternative to completely excluding them

18. Rights after 12 week qualifying period
Entitled to “equal treatment” after a 12 week qualifying period
Must work in the same role with the same client for 12 calendar weeks
Any week during which the agency worker works is counted
Break of more than six calendar weeks between assignments in order
for the 12 week clock to be restarted except in certain circumstances
Multiple clients and multiple agencies

19. Calculating the 12 week qualifying period
Qualifying clock is reset to zero:
– New assignment with a new hirer/client
– Same hirer/client but a new assignment which is
“substantively different”
– Same hirer/client but a break of more than six calendar
weeks between assignments
Qualifying clock is paused:
– Break for any reason of six calendar weeks or less and a
return to same role with same hirer/client
– Break for the purpose of taking leave to which the agency
worker is entitled, including annual leave
– Break of up to 28 weeks due to sickness or injury or jury
service
– Regular and planned shutdown in workplace
– Industrial action at client’s establishment

20. Calculating the 12 week qualifying period
Qualifying clock continues to tick:
– Pregnancy, childbirth or maternity: during pregnancy and up
to 26 weeks after childbirth
– Adoption leave or paternity leave
Anti-avoidance provisions
– Aimed at preventing obvious avoidance

21. What rights will agency workers have after
the 12 week qualifying period?
An agency worker will be entitled to the same “basic working
and employment conditions” as he/she would have been entitled
to for doing the same job had he/she been directly recruited by
the client as an employee or worker

22. What rights will agency workers have after
the 12 week qualifying period?
“Basic working and employment conditions” are:
– pay (see next two slides)
– duration of working time
– night work
– rest periods and breaks
– annual leave
“Overall package” being the same is not a defence
After 12 week qualifying period, pregnant workers have a right to
time off for ante-natal care
Pregnant women and new mothers have additional new rights

23. What rights will “agency workers” have after
the 12 week qualifying period?
What will “pay” include?
– basic pay
– paid holiday (above Working Time Regulations entitlement if that
is what a comparable direct hire is contractually entitled to)
– payment of overtime (subject to qualifying conditions being met)
– shift/unsocial hours allowances
– risk payments for hazardous duties
– vouchers or stamps with a monetary value, eg luncheon and
childcare vouchers
– bonus or commission payments directly attributable to the amount
or quality of the work performed by the agency worker, eg
commission linked to sales targets

24. What rights will “agency workers” have after
12 week qualifying period?
What will “pay” not include? (examples)
– payment in respect of maternity, paternity or adoption leave
– financial participation schemes such as share participation
and profit sharing
– occupational sick pay
– occupational pensions
– redundancy payment
– benefits in kind such as health insurance
– bonuses based on organisational performance and those
designed for long-term motivation and retention of staff
– further examples: see BIS Guidance
The additional experience and qualifications of the comparable
direct hire can be taken into account and justify why the pay rate
of the agency worker is lower

25. Liability and penalties
Protection from detriment
The Regulations will be enforced through Employment Tribunals
Crucial to have internal complaints procedures in place for
workers to express concerns about equal treatment
The agency has a potential defence – if it has obtained or taken
reasonable steps to obtain relevant information from the client
AND has acted reasonably in determining the basic working and
employment conditions AND has treated agency worker
accordingly
The Employment Tribunal will apportion liability and any
financial sanctions between the agency, the client and any
intermediaries

26. Liability and penalties
Agency worker can bring a claim for breach of the Regulations
within three months of the alleged breach
Employment Tribunal can make a declaration, order payment of
compensation and make recommendations for action
Employment Tribunal can award compensation of not less than
two weeks’ pay as well as any expenses or other losses
incurred
Compensation of up to £5,000 can be awarded for breach of
anti-avoidance provisions

27. Liability and penalties
No cap on compensation
Other “costs”
– reputation
– management time
– stress
– relationships between recruiters and clients
How evidence is gathered
– beware emails, telephone calls: always act professionally
– beware data subject access requests

28. Possible workarounds
Do workarounds need to be considered?
Assignments of less than 12 weeks
– concerns about agency worker turnover?
– beware anti-avoidance measures
“Margin only” assignments direct with end user – headcount
issues?
In-house temporary staffing banks – staff must only work for the
business that employs them

29. Possible workarounds
“Swedish” derogation
– agency workers with permanent contract of employment with
the temporary work agency are not entitled to equal pay
– paid between assignments for an aggregate of at least 4
weeks before contract can be terminated – not less than
50% of highest level of basic pay and at least National
Minimum Wage
– other conditions that must be satisfied
– entitled to all the other rights under the Agency Workers
Regulations

30. Possible workarounds
Self-employed contractors
– use the usual tests of self-employment – see Directgov link
in the BIS Guidance
“Project” basis without end user client “supervision or direction”
– paid for delivering pre-scoped deliverables
– substitution rights: not personal service

31. Implications for end users
Administrative burden
– end user clients will need to work with recruiters to assess
whether workers supplied are within scope
– if within scope, end user clients will have to compile data
about pay and other working conditions and establish the
correct rate of pay and other working conditions to which
each agency worker is entitled
– calculating the 12-week qualifying period

32. Implications for end users
Higher cost of agency workers?
– widely reported concerns that costs will increase, but
depends on the type of agency workers engaged
– highly paid professional/technical agency workers?
– lower paid agency workers?
– cost of providing “day 1” rights?

33. Implications for end users
Claims against end users?
– if an agency worker brings a claim and the recruiter can
show that it took “reasonable steps” to obtain relevant
information from the end user and acted reasonably in
determining what the agency worker's basic working and
employment conditions should be at the end of the 12-week
qualifying period, the end user will be liable to the extent
there is a breach of the Agency Workers Regulations
– end user client will be liable for failure to meet its obligations
to put in place “day 1” rights

34. Implications for end users
Concerns about providing pay data on comparable direct hires to
recruiters?
Request confidentiality and non-poach undertakings from
recruiters
Will be asked by recruiters to sign new contracts or agree
contract amendments or, if you contract on your own terms, these
will have to be amended

35. Implications for end users
New contract terms are likely to include:
– obligations on end user client to provide information on the
basic working and employment conditions of comparable
direct hires
– potential fee increases
– confidentiality and non-poach undertakings from recruiters
– indemnities – ensure appropriate risk apportionment

36. New information to be supplied to workplace
representatives
The Regulations impose new obligations on employers when
disclosing information to employee representatives in:
– collective redundancy
– collective bargaining and
– TUPE transfer situations

37. New information to be supplied to workplace
representatives
In these situations, from 1 October 2011, employers must also
include the following in the information supplied:
– the number of agency workers working temporarily for and
under the supervision and direction of the employer
– the parts of the employer's undertaking in which those
agency workers are working
– the type of work those agency workers are carrying out

38. New information to be supplied to workplace
representatives
Failure to comply is likely to result in a financial penalty
Employers must ensure their processes and pro-forma
documentation for collective redundancy consultation, collective
bargaining and TUPE transfer situations include this information
going forward

39. Implications for recruiters and other suppliers
Costs will all be passed on to recruiter?
– increased pay rates will be deducted from recruiter’s
margin? unfair burden - negotiate!
– cost of comparator exercise will be borne by recruiter?
– end users will ask for indemnities?
Recruiters and other suppliers will have to request “comparator”
information:
– if commercially sensitive: offer confidentiality and non-poach
undertakings to end user clients?
– offer “comparator consultancy” as a value add?
– chance for recruiters to build deeper relationships with end
user clients?
– contract terms will need to be re-written

40. Practical tips for staying ahead
Work with all relevant areas of your business and your recruiters
to assess the impact of the Regulations on your business
– review your use of temporary contract workers
– identify who is and who is not within scope
– break down those within scope by skill sets and pay grades
– assess what “equal treatment” will entail
– formal pay bands: compare the current pay rates of agency
workers with entry level rates at the client
– no formal pay bands: look at pay rates of existing staff doing
the same or similar work for the client
– assess any cost impact
– consider amending salary bandings and bonus schemes

41. Practical tips for staying ahead
Is the likely cost impact significant? If so, agree pricing with
recruiters and/or consider workarounds
Put new contracts in place or amend contracts where necessary
with appropriate agreement on risk apportionment and any
increased payments, confidentiality and non-poach provisions

42. Practical tips for staying ahead
Involve Trade Unions where necessary
Develop an internal process to collate information on the basic
working and employment conditions that would apply if agency
workers were recruited directly
Establish a procedure for passing this information on to
recruiters and to any agency workers who may request this
information

43. Practical tips for staying ahead
Track the use of agency workers in the same role to establish
when the 12-week qualifying period is completed
Make any necessary changes to give agency workers access to:
– your collective facilities and amenities such as canteen,
crèche, on-site gym, transport facilities
– relevant permanent vacancies within your business, for
example, by extending intranet access

44. Conclusions
The Agency Workers Regulations 2010 (as amended) will be
law from 1 October 2011
Read the BIS Guidance for clarification of how the Regulations
are intended to work
Do not panic - beware scaremongering – unlikely to apply to all
agency workers and little effect in many cases
If not already done, impact assessments are the key immediate
step

45. Any questions

46. The Agency Workers Regulations
Are you ready for 1 October 2011?
Seminar for end users
8 September 2011
Bridget Wood, Head of Recruitment sector group
bridget.wood@bllaw.co.uk
020 7814 5426
Stephanie Slanickova, Senior solicitor
stephanie.slanickova@bllaw.co.uk
020 7814 5422