Contractors’ Questions: How have the agency workers rules changed?

Contractor’s Question: Although they may be technical in nature, what is the effect of amendments made last week to the Agency Workers Regulations?

Expert’s Answer: The Amendment Regulations correct a limited number of so-called 'drafting errors', most notably:

• the definition of 'agency worker';
• the provisions governing the use of 'pay between assignments' contracts of employment (also known as 'Swedish derogation' contracts); and
• the provisions governing the liability of temporary work agencies and hirers for breach of the agency worker's right to equal treatment under Regulation 5.

The Amendment Regulations alter the (probably unintentionally narrow) definition of an 'agency worker' in Regulation 3(1) of the AWR, from an individual who has a contract of employment with the agency or 'any other contract to perform work and services personally for the agency' to an individual who has a contract of employment with the agency or 'any other contract with the agency to perform work or services personally'. 

This shift in emphasis is to make it clear that the agency worker does not have to perform work or services for the agency itself.  The agency worker will have a contract with the agency which most usually will cover work or services for a hirer.  The change to 'work or services' also broadens this definition which now better reflects the nature of agency working.

There is an exemption under the AWR from the obligation to provide equality of pay to agency workers who are employed on permanent contracts of employment by a temporary work agency and paid between assignments if available to work.  The Amendment Regulations amend Regulation 10(1)(c) to make it clear that the temporary work agency's obligations to pay the agency worker and to look for suitable work when the agency worker is not working but is available to do so only apply after the end of the first assignment under that contract. 

This is to ensure that there is no confusion or expectation that an agency worker will be entitled to receive pay during any period spent not working but available to do so before the commencement of the first assignment under the contract (if, for example, he or she enters into the contract some time in advance of the first assignment).

The Amendment Regulations also rephrase a temporary work agency's exemption from liability (Regulation 14) for a breach of the right to equal treatment under Regulation 5, where it is established that the temporary work agency has obtained, or has taken reasonable steps to obtain, relevant information from the hirer 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 changes make it clear that such information must be about the hirer's basic working and employment conditions, but it only has to be information about the relevant terms and conditions of a comparable employee of the hirer if this information was needed to assess compliance with Regulation 5.  If the temporary work agency can establish this defence, the hirer will be liable for the breach.  The hirer will always be liable for breach of the 'day one' rights given by Regulations 12 and 13.

So what should you do next?

If you have already drafted contracts and other documentation to cover the introduction of the Agency Workers Regulations, you should revisit them to see if they need amending in light of the changes made by the Amendment Regulations. 

The expert was Bridget Wood, recruitment group partner at legal firm Blake Lapthorn