Temporary Agency Workers Legislation
31 July 2009
On 31 July the consultation closes on the implementation of proposals for a Temporary Agency Workers Directive. Whilst the next step is for the Government to publish its response on this before further consultations on draft Regulations, it is very likely that the Regulations will be put in place before the proposed implementation date of December 2011 as Unions have been pushing for early implementation following the BMW sackings earlier this year where agency staff at BMW were sacked with an hour's notice presumably on the basis that BMW considered that the workers were not their employees and could not bring claims for unfair dismissal, redundancy payments or for not receiving statutory minimum notice of termination.
The key provisions of the Directive are that temporary agency workers must, during their assignment with an employer, be at least the same as those that would apply if they had been recruited directly by that employer to occupy the same job. Agency workers will need to have 12 weeks employment with an employer before they are entitled to equal treatment. There will also be a prohibition on employers ending an assignment with an agency worker before the 12 weeks only to re-engage to try and avoid the equality provisions.
As an employer and if you do employ temporary staff (whether this is via an agency or a temporary worker employed directly by you) this may have a significant impact on your business as temporary staff or are often seen as a resource that can be turned up or down depending upon the demands of your business. Therefore you need to ensure that you are prepared for the change and plan your business for the future and how to budget for temporary staff.
We have always advised that if you employ someone on a temporary basis directly yourself that they are treated equally in line with your permanent staff, however, it is the agency staff that only get their hourly rate and no other benefits that is the key change to most employers.
So what is an agency worker?
An agency worker is an individual engaged by an employment agency to perform work for the agency's clients. The worker has a contract with the agency, but not with any client for whom they work.
What rights do agency workers currently have?
An agency worker's rights are determined by their status (i.e. employee, worker or self-employed individual) and determining status is notoriously difficult. While agency workers who are not employees benefit from some protection, for example in relation to discrimination, national minimum wage and the Working Time Regulations, they do not have the right not to be unfairly dismissed, to receive a redundancy payment or to receive statutory minimum notice of termination.
When is an agency worker an employee?
An agency worker could be an employee of the agency or of the client or of neither - in which case they could be a worker or self-employed. Unsurprisingly there has been considerable litigation by agency workers seeking to establish that they were employed by the agency or the client in order to benefit from an employee's rights.
In the most recent relevant case brought to employment tribunals it has been rare for a worker to be an employee of the agency, because the agency does not have day-to-day control of the worker, does not gain direct benefit of the work being done by the individual, and because there is no obligation on the agency to find work for the worker or on the worker to accept it. Also, a contract of employment between an agency worker and the client will only be implied where it is necessary to do so. In determining whether such a contract is necessary, a number of factors should be considered including how the contract is performed, whether the client is paying for work done by the worker or for services of the agency and whether the client can insist on a particular worker being provided. It is important to note that the passage of time by itself does not establish any mutual obligations between a worker and a client.
What protection will agency workers have in the future?
The Directive provides that the "basic working and employment conditions" of temporary agency workers shall be at least those of an employee in the same undertaking occupying the same job. While there are likely to be arguments as to who the appropriate comparator is, the Directive does clarify that basic working and employment conditions means conditions relating to the duration of working time, overtime, breaks, rests, night work, holidays and public holidays, and pay.
However, as the Directive does not give the agency workers any protection in terms of unfair dismissal, notice period or the right to a redundancy payment, actions such as those taken by BMW in relation to agency workers are likely to remain lawful.
Finally, as the consultation paper is open to employers, you might wish to take advantage of taking part in the on line survey run by BERR (Department for Business Enterprise and Regulatory Reform) who are seeking the views of, among others, companies that use agency workers, temporary work agencies, and temporary workers that closes on 31 July 2009 :
BERR Temporary Agency Workers Survey