Agency Worker Rules For Employers And Agencies

Question - Why suggest to your contractors and end clients that every ‘quality Contractor or Interim Manager’ should use a Limited Company coupled with Qualified Accountants?

Answer - the rules only apply to workers who come via an agency – the self-employed who provide your business with services don’t qualify for new rights and neither do Managed Service Contract workers.

Overview

The law for temporary staff is set to change yet again - if you hire or place seasonal workers or take on help to cope with busy periods, the new rules for temps could mean extra cost. As of 1 October, the Agency Workers Regulations give temps and agency workers some of the same rights as your full-time staff from their first day on the job. After three months (12 weeks) in the same job, the rules will grant your temps the same pay and overtime rates as your permanent workforce, as well as paid holiday.

In 2010 the Government estimated that half temporary assignments are longer than 12 weeks, which means that a lot of businesses round the UK will have to prepare in advance. However, taking a few simple steps now will prepare you for the new law and could save you money.

Steps to take to make sure you are compliant

These are simply good practice ideas, and to reiterate if you are engaging Contractors operating via Ltd companies then you do not have a general cause for concern -

Step 1 – Tell HR and the managers who use temps about the legal changes. The new principle is that after 12 weeks an agency worker should be treated as if they had been recruited directly. Part-timers and temps who take a break during the assignment also qualify for the rights - for instance, even if a worker took a break for up to six weeks but came back to the job, only another six weeks would pass before he/she can claim full rights.

Make it clear that from Day 1 your business costs could rise to include everything from extra chairs in the canteen to a bigger car park. Explain to those who manage temps day to day that when an agency worker is kept on for a few weeks longer than planned, costs will rise further to provide them with paid holiday (but not pensions, sickness or parenting pay).

Step 2 – Establish that the temps you call in are really necessary. If you hire seasonally or ad hoc to cope with unexpected short-term sickness, no problem. But if it turns out that you are regularly calling temps in because you are endlessly understaffed or to save paying overtime, you may find the new rules mean you’re no longer saving money.

Step 3 – From October, the end client, not the job agency, are legally responsible for making sure temps are getting access to all the facilities at work from their first day. Tell agency workers they are free to use the canteen, car park and any other facilities, such as a creche (NOT Ltd company workers) but this WOULD include Umbrella workers in our opinion. Put up a noticeboard with any job vacancies so everyone can see it – temps have a right to know about internal positions on offer. If you don’t, you could be liable to legal action.

Step 4 – For longer temp contracts, clients will need to be mindful of the terms and conditions they provide to the job agencies you use so they can match them to make sure your temps are getting equal treatment from week 13. The terms to mirror are those your firm offers to a permanent employee who has just started in that job – if that looks like a cost problem, consider introducing qualifying periods for permanent staff. Don’t forget that pregnant agency workers must also be allowed to take paid time off for ante-natal appointments.

As time goes on, make sure that any changes you make to the terms and conditions of permanent employees are mirrored in contracts with temporary staff who have achieved the 12-week service requirement.

Step 5 – Be wary of anti-avoidance rules. As the Regulations say themselves “there is nothing to prevent an agency worker being released after say 11 weeks or for assignments of 12 weeks to be the usual practice of any hirer.” But firms should note that a pattern of firing and re-hiring temps that deliberately deprives them of their entitlements is easily spotted and won’t go down very well at an employment tribunal.