Business Law: New rules on agency workers require care, says Andrew Fleming

IN THIS highly regulated world, agency workers provide businesses with flexibility and a range of skills which the permanent workforce may not always have. They are particularly helpful in covering periods of temporary leave and of high demand.

For the last few years, the Government had been considering legislation to protect agency workers’ rights and the result, after a long consultation process, was the Agency Workers Regulations in October last year.

The main effects were that, from day one, agency workers are now entitled to the same collective facilities and amenities as permanent workers and to receive information on any vacancies arising, and that, from the end of week 12, agency workers are entitled to the same basic working and employment conditions as permanent workers.

Over the last few months, however, practical difficulties have arisen in providing the same conditions as permanent workers, particularly in working out comparative pay where bonuses and commission are involved and in calculating entitlements to holiday and sickness benefits. Where someone is taken on to cover a range of responsibilities, the calculation of comparative benefits can become problematic. Furthermore, if these responsibilities change during the agency worker’s time in the business, then his or her conditions are required to be reassessed.

It is unsurprising then that both agencies and hirers have sought to avoid or downplay the obligations of the regulations by various means. It is now standard practice to have a “managed service contract” between agency and hirer, where a general service is offered rather than involving a specific worker.


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Alternatively, some employers use the services of a limited company employing the worker rather than taking on the worker direct. Others simply have a policy of engaging the services of an individual worker for a maximum of 12 weeks so that the main provisions of the regulations do not apply.

With high worth workers, it is increasingly common for employers to require the worker to sign a compromise agreement, preventing him or her from making any claim for unfair, constructive or wrongful dismissal or a claim in respect of discrimination if and when the period of working comes to an end.

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All these possible solutions need to be carefully considered before they are acted upon, since employment tribunals are keenly aware of their existence and there are specific anti-avoidance provisions in the regulations. An employer must be able to justify these steps for reasons of business efficacy or there is a danger that they will be seen as efforts to avoid the intended purpose of the regulations.

: : Andrew Fleming leads the corporate and commercial teams at Blocks Solicitors.

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