Beware employment law pitfalls when using agency workers

Some sectors, such as healthcare and construction, rely on a ready supply of temporary staff, and it is a rare business that does not need to use agency workers from time to time. 

The rights of agency workers have been under considerable government scrutiny recently, and changes are on the horizon that will affect any business which uses a temp agency.  

Gillian Reid, employment law expert with Ware & Kay in York & Wetherby, outlines the current employment rights for agency workers’, how you can reduce risks to your business and the future changes expected in 2021.

Agency workers’ rights

Here is a summary of the most significant rights for agency workers:

• access to staff facilities, such as a canteen or work gym, on no less favourable terms than other comparable staff unless you can objectively justify treating them differently;
• to be informed of relevant job vacancies with the business;
• after 12 weeks, to take time off work to attend antenatal appointments or adoption placement appointments; and
• after 12 weeks, to have the same basic working and employment conditions as if they had been employed directly by the employer. This does not apply to all terms and conditions of employment but includes pay and paid holiday. However, under what is called ‘the Swedish derogation’ you do not have to pay agency workers the same rate of pay as a comparable employee, if the worker has a permanent contract of employment with the agency and certain conditions are met.

Can I avoid agency workers getting rights?

In short, no. To back up the rights that are based on a 12-week qualifying period, anti-avoidance rules apply. Where an employer arranges the agency workers’ assignments in a way that prevents them from working 12 weeks continuously and the most likely reason for this is to prevent the worker gaining their rights, the worker will be treated as having completed the 12-week qualifying period. If there is a break of six weeks or less between work assignments, these will be linked together and count towards the 12-week period.

For example, if an agency worker works for 11 weeks and is then replaced by a different agency worker, but taken on again seven weeks later, this could well be caught by the anti-avoidance rules.

An employment tribunal can make an additional award of £5,000 to an agency worker, if it finds that the employer tried to stop them from completing the qualifying period.

Who is liable?

An employment tribunal may decide that the employer, the agency or both should pay damages to the worker. Liability depends on the right that has been breached and who is responsible.

A recent Court of Appeal case London Underground v Amissah is a reminder that you should not just rely on the agency to decide if the regulations apply and you should be careful in choosing the agency. London Underground initially relied on the agency’s wrong assurances that the regulations did not apply, and the agency paid the workers less than the comparable employee. Realising the error, London Underground gave the difference in pay to the agency who did not pass it on to the workers and then went into liquidation. Despite having already paid out, the London Underground was held liable for 50 per cent of the compensation due to the agency workers.

How can I protect my business?

Your agreement with the agency should make clear who is responsible for what in relation to each worker.

If the agency workers are not given the same basic working and employment conditions as your employees doing the same job, and you have not given the agency certain information then the agency may be able to argue that they are off the hook.  You might then shoulder all the liability.

We can advise you on the information that you need to give to the agency and when to give it.

What is going to change?

The government has proposed a number of changes which, if you use agency workers, will affect you from 6 April 2020 when new regulations are expected to come into force. These include:

• after 12 weeks, all agency workers must be paid the same pay as comparable staff. You will no longer be able to rely on ‘the Swedish derogation’;
• the right to a written statement of terms on the first day of working; and
• when calculating holiday pay for workers with irregular hours, a week’s pay will be averaged out over the previous 52 weeks, instead of 12 weeks.

The government proposes other changes, which could give agency workers greater rights. These include more generous rules for employees to accrue the right to protection from dismissal; the right to request a more predictable and stable contract after working 26 weeks; and clarification of employment status. We do not know when these will be introduced, but we will keep a close eye on developments.

We can check your current arrangements to ensure that you are complying with the law and that you are minimising your liability, where possible. We can also advise you on how to prepare for the changes in agency worker rights.

For advice on agency workers or any employment law issues, please contact Gillian Reid in the Employment team on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email gillian.reid@warekay.co.uk.