What legal rights are agency workers entitled to?

A recent report from the Resolution Foundation Agency found that temporary workers are losing at least £500m a year in missing holiday pay and are being paid an average of 22p an hour less than employees for exactly the same work.  Paul Holcroft, Associate Director at national human resources and health & safety consultancy, Croner, discusses what agency workers are legally entitled to.

An investigation into the fast-growing world of temporary work has revealed agency workers are losing at least £500m a year in missing holiday pay and are being an average if 22p an hour less than employees for exactly the same work. With one million agency workers expected to be present in UK businesses by 2020, employers are encouraged to ensure they are aware of how rights may differ due to agency worker status.

Rights differ according to employment status

The employment rights of agency workers will differ depending on their employment status, with most in this sector classed as ‘workers’. This means they get worker rights from the start of their working relationship including the right to be paid National Minimum or Living Wage based on their age, paid holiday, the right to receive minimum breaks and rest periods, and protection against discrimination.

Due to their protected status as agency workers, and because of the practicalities of how this relationship operates with the third-party hirer, agency workers receive additional rights under the Agency Worker Regulations. From day one of their assignment to the hiring organisation, the agency worker is entitled to access the same facilities and the same information about internal job vacancies as a comparable permanent employee. The extent of facilities will vary between businesses but may including using on-site canteens, gyms or health centres, transport operated by the company and childcare provisions.

What happens after 12 weeks

Once the agency worker reaches 12-week of continuous service within their assignment, they have a right to receive equal treatment for relevant terms and conditions when compared to a comparable permanent employee. These terms are: pay; annual leave; working time and night work; rest breaks and rest periods; and time off for antenatal appointments. So if a direct employee working in the same role is paid more for each hour of work, then the agency worker will be entitled to increased hourly pay once they reach 12 weeks’ service. The Regulations contain “anti-avoidance” measures where unfair assignment structures are being used, such as placing an agency worker with one hirer for 11 weeks and then changing their assignment to a different hirer. Where the agency worker has concerns that they do not receive equal treatment, they can request a written statement from the agency business about their treatment.

‘Swedish Derogation’ or ‘Pay Between Assignment’ contracts

Currently, employment agencies can legitimately use ‘Swedish Derogation’ or ‘Pay Between Assignment’ contracts to be exempt from the right to provide equal pay after 12 weeks within an assignment. These contracts must be an employment contract between the agency business and the agency worker, where they receive a minimum amount of pay between each assignment. As an employment contract, the agency worker will receive employment rights including, but not limited to, the right to not be unfairly dismissed, maternity leave and the right to a statutory redundancy payment. The exemption does not extend to the other equal treatment rights, so the agency worker will still be entitled to equal terms including annual leave, compared to a full-time direct hire, when they reach 12 weeks’ service within an assignment.

About the author

Paul Holcroft is the Associate Director at national human resources and health & safety consultancy, Croner.  

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