Agency Workers – Consultation on implementing the Agency Workers Directive

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The European Directive on Agency Workers was approved by the EU member states and the European Parliament in December 2008. In principle, the Directive requires that agency workers have the same basic working and employment conditions as they would have done if they had been recruited to do the same job by the business for which they are actually working.

The Directive allows for a qualifying period before this equal treatment is applicable on the basis of an agreement between social partners at national level. In May 2008, the CBI and the TUC agreed that equality of treatment would apply to agency workers after 12 weeks in a given job. A number of other issues may be decided at a national level and proposals for these are included in the consultation.

EU member states are required to implement the Directive by 5 December 2011. The UK Government wishes to implement the Directive in the current parliamentary session, which means that the necessary Regulations would come into force in April 2010. The initial consultation document, setting out the policy proposals, has now been published and the consultation will run for 12 weeks, until 31 July 2009. Draft Regulations and guidance will be published later in the year.

The consultation document seeks the views of agency workers, temporary work agencies, companies who use agency workers, companies that manage agency worker contracts, trade associations, representative bodies and other representatives of agency workers (including trade union and workplace representatives).
The current consultation applies only to Great Britain. A separate consultation exercise will be carried out in Northern Ireland, leading to separate legislation.

Government proposals
The following are the key proposals on which the Government is consulting. They are all subject to change.

1. The rules will apply to “workers”, using the definition from the Working Time Regulations 1998, suitably adjusted to reflect the triangular relationship between an agency worker, the “employment business” and the hirer. The definition would cover agency workers contracted to “umbrella” companies (e.g. where the hirer pays the agency, the agency pays the “umbrella company”, and the umbrella company pays the worker), but not those who are genuinely self-employed, or who work through their own limited company (i.e. there is no direct contract between the worker and the employment business), or are employed on “managed service contracts” (i.e. where the workers are employees of and supervised by the agency).The Directive uses the term “temporary work agency” for the agency supplying the worker and this equates with the terms “employment business”, as used in UK legislation, and “temp agency”, as they are commonly known. The worker’s contractual relationship is with the employment business and the employment business is responsible for paying the worker and providing statutory leave and other entitlements. The new rules will not apply to “employment agencies”, the term used in UK legislation for agencies that introduce the worker, who then becomes an employee of the hirer.

   The Regulations will apply to “agency workers” who are employed by or have a contract for services with the employment business and who work on assignment with a third-party hirer. The agency worker would need to do the work personally, and not send a substitute.

2. Equal treatment relates to “basic working and employment conditions”, i.e.
   • duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays, (effectively the “working time” provisions), and
   • pay.

   Where a hirer provides “working time” terms and conditions, including rest time and holiday leave, that are more generous than the statutory minimum, agency workers will be entitled to the same entitlements as permanent employees after 12 weeks. Some hirers and agencies already provide some or all of these entitlements from the start of an assignment.

   With reference to annual holiday leave, at least the statutory minimum pay would still have to be paid when a worker takes holiday. However, any contractual entitlement in excess of the statutory minimum could be paid by means of a one-off payment at the end of the assignment or as part of the hourly or daily rate of pay. It would be too complex to make provision for excess holiday entitlement in one assignment to be carried forward to the next assignment.

3. Pay will be defined as basic pay, plus other contractual entitlements directly linked to the work performed, including holiday pay, payment for overtime, shift allowances, unsocial hours premiums and bonuses, and bonuses that relate directly to personal and individual performance, such as piece-work bonuses. However, pay will exclude remuneration paid in recognition of the long-term relationship between employer and employee, such as share participation, profit sharing schemes, company car allowances and pension schemes (but not the coming pension personal accounts).
4. The 12-week qualifying period will be 12 calendar weeks, regardless of working pattern, such as part-time and full-time. A new qualifying period will only start if a new job with the same hirer is substantially different. Views are sought on how long a break there should be between assignments in the same job before the 12-week clock starts again.Where workers continue to be paid at a lower rate between assignments, a practice more common in other EU member states than in the UK, the requirement for equal treatment with respect to pay would not apply if the continuing rate of pay is at least a half of the previous pay rate.
5. Equal treatment will be established by comparison with a comparable worker doing broadly similar work in the same organisation. Where there is no comparable worker, other factors, which may be included in guidance rather than in legislation, may apply.Where an assignment lasts for less than 12 weeks, there will no right to equal treatment, but existing entitlements to the National Minimum Wage and to Working Time entitlements will remain.
6. The primary liability for compliance will lie with the agency but agencies will have a reliable defence if the hirer has provided information that is incorrect or incomplete, despite the agency’s “best endeavours”. The precise nature of the information to be passed from hirer to agency will not be defined. Agency workers will have the right to ask the agency for written information relating to their entitlement to equal treatment.
   7. In the event of a dispute, the issue will be raised by the worker with the agency and, if necessary, agency workers will be able to make a claim through an employment tribunal.

Other issues on which views are sought include:

• whether an exemption should apply where alternative arrangements are agreed by workers’ and employers’ representatives, bearing in mind the potential difficulties caused by the involvement of three parties to any agreement.
• extending existing protections for pregnant women and new mothers to include
  • the right to a temporary adjustment to working conditions and hours where there is a risk to her health and safety,
  • the right to suspension on full pay where the risk cannot be removed, and
  • the right to reasonable time off to attend ante-natal appointments.
• providing agency workers with the same access to employment vacancies as permanent employees, from the start of an assignment
• providing agency workers with the same access to onsite facilities, such as canteen, childcare facilities and transport services, from the start of an assignment, unless there is an objective reason for any difference in treatment
• the suitability of existing statutory provisions governing the payment of transfer fees when an agency worker is taken on as a permanent worker
• the Government’s current and planned proposals for making it easier for temporary workers to gain access to vocational training
• the inclusion of agency workers when deciding whether an employer or agency reaches the statutory thresholds for establishing bodies to represent workers, e.g. for negotiation or consultation purposes
• provision of information about agency workers by hirers to workers’ representatives.

Further information:
Employment Agencies – Implementation of the agency workers directive: A consultation paper

This entry was posted on Monday, May 18th, 2009 at 05:00 and is filed under Childcare, Minimum Wage, National Minimum Wage, NMW. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.