More than one million agency workers will be affected by the new Agency Workers Regulations which are also likely to mean higher costs for commercial sector companies and public organisations.
Anyone who tries to structure assignments to avoid the regulations could face a compensation claim of up to Ã‚Â£5,000 – in addition to other claims.
The far reaching regulations come into force on October 1st and will mean that after 12 weeks on assignment agency workers will be entitled to the same pay and conditions as permanent employees doing comparable work.
Kelly Sayers, Partner and Head of Employment Services at Prettys says: “For any company that engages agency workers the new regulations could have costly consequences. It is essential that companies, agencies and organisations understand this complex legislation and seek appropriate advice to ensure they do not fall foul of the new regulations or inadvertently contravene them.”
In the UK, where around 1.3million workers are provided through temporary employment agencies, the regulations could increase the cost of hiring a temporary worker by around 10%.
The regulations will not only affect every organisation that uses agency workers, but also the freelancers, contractors and temporary workers who find work via such “umbrella” agencies.
The legislation is not retrospective, so for those agency workers already on assignment, the 12 week qualifying period starts from 1 October 2011.
Kelly Sayers adds: “Companies need to consider how the regulations affect their business. Their impact will vary depending on how many agency workers a company engages.
“Companies will need to have systems in place to comply with the regulations and cut the risk of an agency worker making a claim against them at an Employment Tribunal. It will also help them to successfully defend against a claim should they find themselves in that situation.”
For most businesses that use agency staff, the regulations will require a fresh approach to taking on staff and how they work with their supplier agencies.
Where companies hire workers through an agency, the onus is on them to ensure that they keep the agency up-to-speed with their terms and conditions so that agency workers – after 12 weeks in one job – get the same treatment as if they had been recruited directly.
However, it is important that companies are aware that the 12 weeks qualifying period can be accumulated even if the agency worker is only working a few hours a week.