International Law Firm Eversheds has recently conducted a study to gauge business reaction and identify what steps agencies and hirers anticipate when the Agency Workers Regulations 2010 come in to force, in just 4 months time on 1st October 2011.

Three years ago, when the firm asked the same question, 64% of respondents indicated an intention to reduce their use of agency labour as a result of the Agency Workers Regulations. That percentage has now reduced dramatically to just 24% of respondents.

The report found that fewer employers planed to reduce the amount of agency labour they would use and 34% of respondents were still paying agency workers less than comparable employees.

Mark Hammerton, partner at Eversheds comments:

“This could suggest that hirers have already reduced reliance on agency workers but this would run contrary to recent reports that flexible working is flourishing.“

The study also reveals a greater confidence amongst employers, with over half of respondents (55%) stating they plan to retain current levels of agency labour, compared to one third of respondents previously.

Mark Hammerton comments:

“The relatively long introduction to the Regulations since 2008, has at least allowed hirers some opportunity to review their business needs and to prepare for 1 October 2011. There are nonetheless many adjustments still to be made. 34% of those responding to our study believe that their agency workers are paid less than comparable employees, clearly a fundamental issue many hirers still face. For qualifying agency workers, basic pay and conditions will either (a) need to be brought up to the same level as comparable employees or (b) alternative arrangements need to be in place once the Regulations are in force in October.”

A third of respondents (33%) believe their pay levels are equivalent to (or, in some cases, even greater than) those offered to employees. Even this group need to take care, however, over how they approach this. Mark Hammerton continues:

“When the Regulations were first published, it was assumed by many that the right to equal treatment as regards pay enables consideration of pay as a whole so that, where the total pay “package” of an agency worker is at least the same as the employee with whom they are comparing themselves, there would be no breach if certain other benefits or payments are excluded. There are a number of reasons why such an approach is not correct, nor compatible with the Regulations, not least that the Regulations refer to “the same” pay and benefits and contain no apparent defence for hirers providing “broadly similar” terms.”

Mark Hammerton concludes:

“Two clear changes in practice emerged from the study results, firstly that employers plan to take steps to increase awareness of the Regulations across line managers and they will also improve their procedures for hiring agency staff. The sharing of information between all those involved in an agency arrangement is a vital aspect of the Regulations. It has particular significance to hirers in terms of potential liability for breach.

“For the most part, the agencies will be responsible for ensuring the workers receive equivalent pay and conditions after 12 weeks in accordance with the Regulations. However, if the agency has requested relevant information of the hirer to ensure compliance and this has not been forthcoming or has been inaccurate, liability for any subsequent claim by an agency worker may well rest with the hirer. Hirers are in any event responsible for ensuring agency worker access to collective facilities and information about vacancies. Improving awareness of the new rights across managers and having clear procedures for hiring agency workers is likely to prove invaluable to hirers. A clear, co-ordinated approach can also only improve the supply of appropriately skilled and experienced agency workers to meet the hirer’s needs.”