Given the uncertainty around Brexit, lots of employers are using agency workers to fill roles whilst they wait and see what’s going to happen going forward. Given that we’ve now had the Agency Workers regulations 2010 for 9-years, most are now used to the idea that after 12-weeks, the agency worker has the right to ‘equal treatment’ with directly recruited staff of that hirer in respect of basic working and employment conditions.
The case of Kocur vs Angard Staffing Solutions 2018 established that a term by term approach is required to the question of parity rather than examining all the employment conditions as a total package. Failure to provide an agency worker with the same annual leave entitlement or paid rest breaks enjoyed by the hirer’s permanent employees could not be compensated for by an enhanced hourly rate of pay. It is therefore important to look at each aspect of comparing your agency workers with your own staff.
For example, in Gregory vs GI Group Recruitment Limited the Employment Tribunal upheld the agency worker’s claim that the calculation of his holiday pay didn’t give equal results to those of permanent staff. He worked a fortnightly shift pattern of three days of 30-hrs in one week and four nights of 42-hrs in week two. His holiday pay was calculated based on his average earnings in the previous 12-weeks in line with the Working Time Regulations. However, he asserted that this resulted in his holiday pay being lower than permanent staff because their monthly salary didn’t vary, and they receive the same pay for periods of work as for periods of leave. The Employment Tribunal accepted there’d been a breach of the Agency Workers regulations and if an agency workers holiday pay is calculated in a different way to that of the directly hired employee, that is a breach of the agency workers regulations and is precisely the sort of mischief that the regulations were seeking to address. Thus, the Claimant was entitled to be paid his holiday pay in a sum equivalent to the amount he would have earned had he been in work.
Clearly one way to avoid this sort of comparison kicking in is to not retain an agency worker beyond the 12-week point, which is something lots of employers now do. Another case illustrates an employer who was attempting to reduce its reliance on agency workers and found a way to get round the regulations:– Birdseye Limited the employer had created a flexible worker role in order to reduce its dependence on agency workers. These employees performed work that had previously been done by agency workers and some of their grade 2 direct employees, but had no fixed shift pattern or standard working hours, and were required to be flexible with regard to where they worked and when they worked committing to a level of stand-by cover where needed. This was categorised as grade 1. They were the appropriate comparators for the agency workers rather than the grade 2 employees. The Claimants argued that the creation of the flexible worker role was a sham arrangement designed to avoid the application of the Agency Workers regulations. The Tribunal rejected that because this was a real role, filled by real people, performing real work and therefore the correct comparator.
You also need to be careful to make sure the agency is passing payment onto the agency worker. For example, a case involving a supply teacher who was being underpaid by £31 per day, whilst the agency involved and the payroll administrator had made little effort to ascertain from the school what its directly hired teachers were paid (you should expect to be quizzed by agencies), the school were aware of the employees abilities and experience and knew what pay scale would apply to her had she been recruited directly. They were guilty of knowingly allowing her to be continued to be paid at a lower rate by the agency, so they were ordered to pay 100% of the compensation involved, which was £3,000 (the case is Ali v’s Cassidy Education Limited).
Under the Good Work Plan the government has plans aimed at protecting agency workers. Employment businesses will be required to provide agency workers with a key facts page showing the type of contract under which they’re engaged, the minimum expected rate of pay, how he or she will be paid, and by whom e.g. an intermediary, any deductions or fees that will be taken and an illustrative example of what this might mean for the worker’s take home pay. This will be enforced by the Employment Agency Standards Inspectorate but no timescale for introducing this has yet been confirmed. It’s remit for investigating umbrella companies will be widened to look at complaints and take enforcement action where necessary.
The most significant development is the proposal to repeal the ‘Swedish Derogation’ and regulation 10 of the Agency Workers Regulations, which excludes agency workers from the right to the same pay as directly recruited workers if they have a contract of employment with the agency that pays them a minimum amount between assignments and satisfy certain other conditions. The review found that this is open to abuse and some agencies are using these contracts to reduce their pay bill. This should stop agency workers being forced to accept contracts providing for pay between assignments just before the right to equal treatment would be normally triggered at week-12, thereby enabling employers to pay them less than permanent employees doing the same work. This will be prohibited from the 6th April 2020.