During the presentation and in the following questions session, there was much debate about Regulation 10 of the Agency Workers Regulations (AWR). This Regulation has the potential to exclude the operation of the AWR in respect of pay. Compliance with the various provisions outlined by Regulations 10 and 11 are essential to avoid the equal treatment provisions in respect of equal pay.

Some temporary work agencies have been putting in place contracts with their agency workers, whom they have placed purporting to amount to a contract of employment wherein such contracts set out minimum rates of pay, location where the agency worker may be expected to work, the expected hours to be worked, nature of the work and a statement to the effect that during periods of absence of any assignment the agency as an employer will pay the agency worker a minimum amount of remuneration. The minimum amount of pay is calculated by reference to Regulation 11 and will generally be not less than 50 per cent of the pay paid to an agency worker during a relevant pay period. Furthermore any pay made will not be less than the national minimum wage and any pay due during a period where no work is undertaken must not be less than four weeks’ pay. 

One of the principle issues that have arisen is whether or not a temporary work agency can be an employer for the purposes of satisfying Regulation 10. This is because it is unlikely that such an arrangement would amount to a relationship of employer and employee. This is because based on tests laid down by case law, an employer must be in a position to exercise a sufficient degree of control over the worker, there must be mutuality of obligation and that the provisions of any contract must be consistent with it being a contract of service.

Umbrella companies have also been considering putting in place permanent contracts of employment so as to potentially exclude the operation of the Regulations in respect of pay. Remember umbrella companies are classed as intermediaries under Regulation 4.1.b and are potentially liable for any breaches of the AWR. I made a point during the session that again umbrella companies may find it difficult to persuade an employment tribunal that they are genuine employers. Whilst HMRC readily accept umbrella companies as having employer status, Leading Counsel instructed by us had expressed reservations as to whether or not a temporary work agency or an umbrella company could amount to a proper employer in these circumstances for the purposes of avoiding liability under the AWR.

The response from the floor was that an umbrella company is a proper employer and could put in place contracts of employment so as to exclude obligations insofar as they related to pay under Regulation 10. However, it will almost always be a question of fact in each case as to whether the arrangements put in place with agency workers amount to an employment relationship and not merely a device to get around obligations as to pay under the AWR.

If a temporary work agency or an umbrella company wish to argue that they are true employers, then they will need to satisfy the employment tests which I have referred to above and laid down by iMcKenna J in Readimix Concrete (South East) Limited v Minister of Pensions and National Insurance (1968), which still remains good law and has been cited in a number of recent Court of Appeal decisions.

Furthermore the guidance issued by BIS, published in May 2011, states on page 6 that an individual is not prevented from being an agency worker under the Regulations simply because they work through an intermediary body. It cites the example of an individual working through an umbrella company who finds work through a temporary work agency will normally have an overarching employment contract with the umbrella company with full employment rights.  In such circumstances, according to the BIS guidance, this would not prevent the individual from benefiting from these Regulations.

This is a very grey area which no doubt will be an issue that will come before the employment tribunals for determination in due course.

I have written an article, published in May’s edition of Workplace Law magazine, on what employers need to do now to ensure they meet the demands of these impending Regulations. A copy of the article is available to read here.

To read other articles I’ve written on the issue, please click here.

If you would like more information on these Regulations and their potential impact on your business, or if you are considering employing agency workers, please contact me at michael.delaney@mablaw.com.

The Regulations give temporary agency workers the right to equal treatment in comparison to permanent workers in regard to basic working terms and conditions (e.g. pay, working time and annual leave) once he/she has completed a qualifying 12 weeks’ service in the same role.

On 1 April 2011, the Government launched a two-week consultation on the draft version of the guidance. Click here for more details.

The final guidance, which has been produced by the Government in partnership with businesses, trade unions and recruitment agency representatives, aims to help hirers and agencies understand the requirements of the Regulations.

Among other things, the guidance explains:

1. How to determine whether the Regulations apply to a particular organisation or individual;

2. What arrangements fall outside the scope of the Regulations;

3. How to calculate when the 12-week qualifying period for equal treatment has been met;

4. The facilities to which agency workers will be entitled from the beginning of an assignment;

5. When agency workers will be entitled to bonus payments; and

6. The terms and conditions to which agency workers will be entitled after having completed 12 weeks in a given job with a hirer.

Separate guidance for agency workers are expected to be published shortly.

For further details of what changes these Regulations will introduce, please click here to read an article I wrote on the subject for Eat Out magazine.

If you have any concerns about how these Regulations will affect your business, please contact me at michael.delaney@mablaw.com.

These Regulations will introduce some very important changes to the rights of agency workers. I have already hosted and taken part in several seminars for employers, outlining how the forthcoming changes will affect businesses and offering advice on how businesses and HR departments should properly prepare for them. Please click here for more details. 

On 4 May, the national HR magazine Personnel Today published an article on the key provisions of the Regulations that employers should consider - please click here to read it on the Personnel Today website. In this article, I have commented on holiday pay and paternity pay entitlements for agency workers, and looked at agency workers’ claims for unfair dismissal. For further details of what changes these Regulations will introduce, please click here to read an article I wrote on the subject for Eat Out magazine.

If you have any concerns about how these Regulations will affect you and your business, please contact me at michael.delaney@mablaw.com

The guidance makes it clear that the law will not be retrospective and that the new rights to equal treatment as far as pay is concerned will only apply after an agency worker has completed a qualifying 12 weeks’ service in the same role. However, time will run from 1 October 2010 and not before.

The Regulations give further guidance on the definition of a ‘Temporary Work Agency’, which includes a high street agency, or indeed an intermediary such as an umbrella company or a master or neutral vendor arrangement if they supply agency workers. 

In other words, an agency worker who is engaged through an umbrella company who finds work through a temporary work agency will be covered by the Regulations, as will arrangements governed by a master vendor or neutral vendor arrangements.

The Regulations also make clear that there is an exemption from equal treatment provisions on pay, where an agency can offer an agency worker a permanent contract of employment and pay the worker between assignments that is during periods when the agency worker is not working as there are no suitable assignments. This means that after 12 weeks in the same role, the agency worker will not be entitled to the same pay as a permanent member of staff as if they had been hired directly.

For further information, please contact me on 01923 208817, or at michael.delaney@mablaw.com

10 February: A seminar at the offices of Deloitte in Milton Keynes;

15 March: A seminar at Jurys Hotel (held in conjunction with Hamlin Knight, a local firm of recruitment consultants); and

22 March: A seminar for local solicitors at Matthew Arnold & Baldwin’s Watford office.

Other seminars will be held later this year. Please monitor our events page for details of forthcoming seminars and talks.

Recently-published research by recruitment company Randstad has suggested that many UK employers are unprepared for the introduction of these Regulations, with only 7 per cent of UK employers saying that they had conducted an assessment of how their business will be affected by the change, and 37 per cent admitting that they are still unfamiliar with the content of the Regulations. Click here for full details.

The following questions were raised at our seminars:

1. What will be the position on 1 October 2011 for an agency worker who has completed 12 weeks in the same role?

2. Who will bear the cost of equal pay and employment conditions?

3. How will hirers or the agency provide increased benefits for, for example, shift allowances, unsociable hours, premiums, dangerous duties, vouchers stamps, and pension contributions to defined benefit schemes?

4. How will commercial contracts be negotiated between the agency and the hirer?

5. Who will agency workers be grouped with (i.e. the agency or the hirer) for the purposes of calculating thresholds for bodies representing workers for statutory recognition procedures (e.g. collective redundancy, TUPE)?

6. Will agency workers be entitled to consultation during redundancy procedure?

7. Will it be easier to hire staff direct rather than through the use of an agency?

8. What systems will hirers put in place to remind them of the obligation to provide the equal pay and conditions after 12 weeks?

9. How will an employment tribunal apportion liability for breaches between the hirer and the agency?

10. Who will pay pension contributions under the National Employment Savings Trust (NEST), which is being phased in from October 2012? and

11. Will a period of employment as an agency worker count towards continuous service if employed permanently by the hirer?

At the time of writing, guidance to the Regulations is still awaited.

UPDATE: 4 April 2011: The Department for Business Innovation and Skills (BIS) published its guidance on The Agency Worker’s Regulations 2010 on 4 April 2011. Click here for more details.

Do you know the answers to these questions? If not, and you would like to discuss how these impending Regulations will affect you and your business, please contact me at michael.delaney@mablaw.com

According to the research, published in Randstad’s Shifting Sands report, only 7 per cent of UK employers have conducted an assessment of how their business will be affected by the AWR, with more than a third of organisations (37 per cent) surveyed admitting that they are still unfamiliar with the AWR.

Under the AWR, agency workers will be given the right to equal treatment with those who are recruited directly by the client, subject to a 12-week qualifying period. This will cover basic working and employment conditions, including pay, annual leave, working hours, overtime and rest breaks. These changes will have wide-ranging implications for UK businesses, so it is therefore essential that businesses ensure they are ready for their introduction. Government guidance on the AWR will be available in the spring.

Over the past few months, Matthew Arnold & Baldwin has been hosting and taking part in seminars that look at how the AWR will affect businesses and what businesses should be doing to prepare for them. Further details are here.

On 15 March, we are hosting a breakfast seminar on the AWR, in conjunction with recruitment consultancy Hamlin Knight. Matthew Arnold & Baldwin’s Head of Employment Michael Delaney will be speaking on some of the important issues and implications surrounding the AWR.  Michael will also be discussing the impact of the AWR in a free seminar for local solicitors on 22 March.

If you have any concerns about how the AWR will impact on your business, please contact Michael at michael.delaney@mablaw.com. 

UPDATE: Michael Delaney has posted details of the main questions/ issues of concern that were raised by employers at our recent seminars. Please click here to read them.

This article highlights the main changes that are scheduled to take place, though other changes may be announced by the Government during the year. We will look at all of these changes in more detail during 2011, nearer to the time that they come into force.

February 2011- New tribunal award limits come into force

The Employment Rights (Increase of Limits) Order 2010 increases the limits of certain employment tribunal awards and other amounts payable under employment legislation. Click here for more details (see the Schedule at the end of the legislation.) The increases apply where the event that gives rise to the award or payment occurs on or after 1 February 2011.

April 2011 – Extension of flexible working

The Government will extend the right to request flexible working to parents with children under 18. A consultation on how to extend this right to all employees and create a new system of flexible parental leave will be published early next year. Click here for further details.

April 2011 – Positive action in recruitment and promotion provisions of the Equality Act come into force

Section 159 of the Equality Act 2010 will come into force. It permits employers to “apply voluntary positive action in recruitment and promotion processes when faced with two or more candidates of equal merit, to address under-representation in the workforce”. However, the Government Equalities Office has stressed that quotas and positive discrimination will remain illegal and that a superior candidate “should always be offered the job.”

April 2011 - Right to request time off to train or study is extended to organisations with fewer than 250 employees.

Employers must seriously consider all requests for time off to train or study, but they can refuse a request if there is a good business reason for doing so. There was some recent confusion over whether this right would apply to organisations with fewer than 50 employees. At the time of writing, it appears that it will. Click here for more details.

April 2011 – Bribery Act 2010

The Bribery Act 2010 introduces a corporate offence of failure to prevent bribery by persons working on behalf of a business. The only defence open to employers will be to show that they have “adequate procedures” in place to prevent bribery and corruption. The definition of “adequate procedures” was considered in a recent public consultation and the Government’s response is expected to be published in early 2011.

April 2011 – Statutory sick pay, and statutory maternity, paternity and adoption pay increases

For full details of the increases, please click here.

April 2011 – Additional paternity leave remains in force

The Government announced in September 2010 that the Additional Paternity Leave Regulations 2010 would remain in force “as an interim measure” in order to facilitate its plans to extend flexible working rights and encourage “shared parenting from the earliest stages of pregnancy.” Additional paternity leave relates to children who are due to be born on or after 3 April 2011, or children who are matched for adoption with a person who is notified of the match or on after 3 April 2011. Click here for more details.

April/October 2011 – Abolition of the default retirement age

The Government proposes to abolish the default retirement age (DRA) of 65. On abolition, an employer will be unable to prescribe a compulsory retirement age, unless he/she can justify it as a proportionate means of achieving a legitimate aim. However, an employer that issues a notification of retirement before 6 April 2011 will be able to retire the employee if his/her retirement date is before 1 October 2011.

The Government’s consultation on the issue, which closed on 21 October 2010, proposed the following timetable for abolition:

6 April 2011 – Transitional arrangements to phase out the DRA and all associated statutory retirement procedures (including the “duty to consider” and “right to request” procedures) will begin. From this date, no new notifications of retirement under the DRA can be issued by employers. Paragraph 4 of Schedule 6 to the Employment Equality (Age) Regulations 2006, which allows an employer to give short notice of retirement of two weeks, will be repealed.

1 October 2011 – The DRA and the statutory retirement procedures will be abolished.

The Government’s response to the consultation is due very shortly.

October 2011 – Agency Workers Regulations come into force

The Agency Workers Regulations 2010 give agency workers the same basic employment conditions after 12 weeks in a given job, as if they had been directly employed by the recruiter. Click here and here for more details.

And…

In 2011, the Government is also reviewing the unfair dismissal qualifying period, and the vetting and barring scheme under the Safeguarding Vulnerable Groups Act 2006 – we will report on any developments, as and when they are announced.

If you have any concerns about these impending legislative changes, or anything else employment-related, please contact me at michael.delaney@mablaw.com.

We will be discussing a number of important issues that are relevant to all HR managers. These include:

1. The Agency Workers Directive 2010;

2. The abolition of the default retirement age;

3. Pension law reforms and employers statutory obligations; and

4. Recent cases and developments on handling disciplinary hearings, reasonable investigations, misconduct dismissals, legal representation, and managing poor performance.

Full details of the seminar are here.

If you are interested in attending, please contact Mark Pavlika at mark@principalstrategy.com

The Agency Workers Regulations 2010 implement the EU Temporary Workers Directive into British law. Under the Directive, temporary workers will receive basic working and employment conditions that are no less favourable than if they had been directly recruited by the hirer. These ‘employment conditions’ cover remuneration, paid holiday, working hours, overtime, maternity, and anti-discrimination provisions. After numerous discussions, the then Labour Government, TUC and CBI agreed that there should be a 12-week qualifying period before a temporary worker would be entitled to receive these conditions.

However, on coming to power, Prime Minister David Cameron said that he did not want the Regulations to be enacted in their current form. In July 2010, the Coalition Government announced that the Regulations were under review due to various concerns raised by the business community about the Regulations, particularly the definition of “pay” and the administration of the qualifying period to infrequent, short-term assignments. However, the Government has been unable to reach agreement with the CBI and the TUC on possible amendments, so no changes have been made.

The Government will now publish draft guidance in early 2011 to help businesses to comply with the Regulations.

These Regulations have naturally caused a lot of concern for employers, and the employment law team at Matthew Arnold & Baldwin recently held some seminars for employers, recruitment agencies and HR professionals on what effects these Regulations will have. If you are concerned about how these Regulations will impact on your business, please contact Michael Delaney at michael.delaney@mablaw.com, or Krishna Santra at krishna.santra@mablaw.com.

Equality Bill

The Equality Bill has been carried over from the 2008-2009 parliamentary session. The Government intends to pursue the Bill in order to “harmonise discrimination law” and to “strengthen the law to support progress on equality”. The Bill addresses the differences in pay between the genders by requiring businesses with more than 250 employees to report on any disparities in the salaries of male and female employees.

UPDATE: It has been reported in the press that the Government will ‘water down’ the Equality Bill to prevent medium-sized businesses with 250-500 employees from having to produce data that shows they do not discriminate on pay in the workplace. The Equality and Human Rights Commission (EHRC) has said that these companies cannot be expected to produce as much data on pay as firms that employ more than 500 workers. The Government will wait until the EHRC’s full report in January 2010 before deciding whether to alter the Bill.

Financial Services and Business Bill

The Financial Services and Business Bill is intended to reform and strengthen regulation of the financial services industry. The FSA will be given powers to cancel employment contracts that contravene specified rules, and to make provision for the recovery of payments made under those contracts that are contrary to the rules. It will also end multi-year guaranteed bonuses, or large bonuses paid out as a cash lump sum at year-end.

Bribery Bill

The Bribery Bill will create a new offence relating to companies that negligently allow their employees or agents to pay bribes, subject to a defence that the company had adequate procedures to prevent bribery.

Agency Workers Regulations 2010

During the Queen’s Speech, the Government made clear its intention to legislate to provide agency workers with the right to be treated equally with permanent staff on pay, holidays and other basic conditions.

The consultation on the draft Regulations closed on 11 December 2009, with the final Regulations expected to be introduced in October 2011.