Legislation to give Britain’s 1.3 million agency workers important new rights was laid before Parliament on January 22nd.

As agreed in 2008 by the TUC and CBI, the changes will give agency workers the right to the same pay, holidays and other basic working conditions as directly recruited staff after 12 weeks in a given job.

Commenting on the Agency Workers Regulations 2010, which implement an EU directive, Business Minister Pat McFadden said:

“This change in the law is aimed at ensuring fairness for agency workers in relation to the permanent employees they work alongside. They are being implemented in line with the TUC / CBI agreement which sought to ensure fairness while maintaining flexibility for the UK labour market – a very important factor in our ability to create jobs.

“It is only by engaging in the mainstream of Europe, actively influencing proposals and securing hard won agreements that we have been able to deliver a sensible and balanced package.”

Laying the Regulations today delivers on the Government’s commitment to get them on the Statute Book before the end of this Parliament.  It will also give agencies, hirers and agency workers time to prepare and plan before the law comes into force next year.

In 2008 the Government secured a deal in Europe on the Agency Workers Directive that allowed Britain’s rules to be based on an agreement reached in the UK between the CBI and TUC.

Since then the Government has consulted extensively with stakeholders, launching policy consultations in May and November last year. Over 300 organisations took part, representing all interests – trade unions, employment agencies, business groups and employers of all sizes from both the private and public sectors.  Consultation events were also held across the country, enabling the Government to hear first-hand about the issues at stake.

For the first time agency workers will be entitled to equal treatment on basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer after 12 weeks in a given job. The rights on pay will apply not just to the basic hourly rate, but to all pay for work done, including bonuses that are directly related to the performance of the agency worker personally. But, as set out in the Directive, they will not extend to some of the wider benefits that permanent staff can enjoy in the context of their longer-term relationship with their employer, such as occupational pensions and sick pay.

To ensure that workers are not deprived of their rights by those who would seek to avoid equal treatment the Regulations include provisions that will deal with repeat assignments designed to prevent workers acquiring equal treatment rights. Agencies and hirers will face the prospect of having to pay out up to £5,000 to the worker if an Employment Tribunal finds that these specific anti-avoidance rules have been breached.  And to provide a greater deterrent in low-value cases there will be a general minimum award of two weeks’ pay, subject only to Tribunal discretion if that level of award does not seem reasonable.

Other benefits that agency workers will gain from the first day of their assignment include:

  • information about internal vacancies to give them the same opportunity as other workers to find permanent employment; and
  • equal access to on-site facilities such as child care and transport services.

Commenting on the implications for the UK recruitment industry, Kevin Green from the Recruitment & Employment Confederation, said:   

“The positive outcome on temp to perm fees and the delayed implementation date are vital wins for the industry. We are pleased that a number of the practical recommendations from our Agency Work Commission have been taken on board despite heavy trade union pressure. There are a number of areas in the final regulations that give cause for concern and our priority now is to work with Government on the official guidance documents to influence the way that the new requirements on recruiters will be interpreted. The industry’s voice has been at the forefront of the political debate on AWD implementation, the next phase is about giving REC members the practical tools to work with clients and prepare for implementation.”   

Highlighting some of the ongoing areas of concern for the industry, Tom Hadley, REC Director of External Relations, said:

“There are some real positives for the industry in addition to the implementation date and temp to perm fees – in particular the exclusion for self-employed workers.  However, a number of areas, give cause for concern such as a wider definition of pay and the issue of short-term repeat assignments which could result in temporary workers acquiring equal treatment rights with several hirers after 12 weeks of an assignment. The REC External Relations team will continue to work pro-actively with the Department for Business to find workable solutions and to develop supporting guidance documents for clients and recruitment agencies.”