As an end hirer, it is essential to understand the employment legislation that applies to agency workers, compared to workers or employees who have been hired directly by you. The Agency Worker Regulations (AWR) 2010 were introduced to remove discrimination facing agency workers in areas such as pay, holiday entitlement and working time conditions.
To support your understanding of the Agency Workers Regulations, we have pulled to the below guide which outlines basic provisions and an end hirer’s key obligations under the regulations.
What do we mean by ‘agency workers’?
An agency worker is an individual who is provided by a temporary work agency to undertake work in a particular job for you as the hirer, under your direction and supervision, on a temporary basis.
The worker is not considered to be self-employed, as they work under an employment contract with the temporary work agency or umbrella company, such as Parasol, and the end hirer will be responsible for managing the individual’s work and what they do on a day-to-day basis during the course of their assignment.
At the outset of the assignment, the agency worker has fewer rights than those of the end hirers employees. It is important for an end hirer to understand when AWR would apply to a worker. To assist you we have set out below the scenarios where a worker will NOT be classed as an agency worker:
- They have found work through a temporary work agency, but they are in business on their own account, e.g. they are self-employed (working via a PSC) and working for you as their client or customer
- Their services are being provided under a managed service contract where they do not work under your direction and supervision, rather under the business that supplies the service to you, and manages the worker.
- They work for an in-house temporary staffing bank, where you employ temporary workers directly and they only work for you
- They are on secondment or temporary loan to you from another company
Specifically, an individual will not be considered an agency worker if they have secured direct employment with you, whether independently or through an employment agency. In such cases, their employment status would fall under either an employee, based on the terms of their contract with you, or a worker in a more general capacity.
What are the Agency Workers Regulations 2010?
The Agency Workers Regulations 2010 were established to ensure agency workers receive equal treatment in terms of basic employment rights and working conditions, comparable to those directly employed by the hiring organization. These rights come into effect after the agency worker has completed a qualifying period of 12 weeks in the same role.
At the heart of these regulations is the principle of fairness, aiming to eliminate any disadvantage faced by agency workers simply because they are supplied through a temporary work agency. Once the 12-week qualifying period is met, agency workers are entitled to the same pay and basic employment rights as permanent staff performing equivalent roles.
Additionally, agency workers gain certain rights from their very first day on the job. These include access to information about internal job vacancies within the hiring organization and the use of shared facilities such as canteens, staff rooms, toilets or showers, workplace creches and parking spaces. These provisions ensure a fair and inclusive work environment from the outset
What are the basic rights of an agency worker after 12 weeks?
Under the Agency Workers Regulations 2010, after completing the 12-week qualifying period, agency workers are entitled to the same basic employment and working conditions as a comparable employee or worker who has been directly recruited to perform the same role.
Equal treatment applies to key areas such as pay, working hours, rest breaks, and annual leave, but it does not include all terms and conditions of employment, such as sick pay, pension schemes, or redundancy pay.
Key elements of pay
After 12 weeks, agency workers must receive equal pay to a directly recruited employee in the same role. This includes:
- Basic pay
- Overtime pay
- Shift allowances
- Pay for annual leave
- Bonuses or commission directly linked to the amount or quality of work performed
Bonuses or commissions that are not performance-based, such as those linked to loyalty, length of service, or company-wide incentives, remain outside the scope of the equal pay requirement. Agency workers are also still entitled to receive at least the National Minimum Wage.
Working time and holiday entitlements
Once the 12-week period has been met, agency workers must receive the same working time and holiday entitlements as comparable employees. This includes:
- Rest breaks: Workers are legally entitled to a minimum 20-minute rest break during a shift exceeding 6 hours. If a directly recruited employee would receive more generous breaks (e.g., a 1-hour lunch break), the agency worker is entitled to the same.
- Annual leave: The statutory minimum of 5.6 weeks applies, but where comparable workers have additional contractual holiday entitlement, the agency worker must receive the same.
- Duration of working time: Agency workers must not be required to work longer hours than a comparable employee. However, End Hirers are not obligated to offer the same number of hours to agency workers, as confirmed in the case of Kocur v Angard Staffing Solutions Ltd [2019].
The Kocur case clarified that while agency workers are entitled to equality in the maximum working time limits, there is no requirement to guarantee them the same number of working hours as directly recruited employees.
Rights of pregnant agency workers
Pregnant agency workers who have completed the 12-week qualifying period are entitled to paid time off to attend antenatal medical appointments and antenatal classes while on assignment.
How does the 12-week qualifying period work?
The agency worker will be entitled to equal treatment having undertaken the same assignment for a period of 12 weeks, regardless of whether they have been supplied by more than one temporary work agency over the course of that period, and no matter how many hours they have worked on a weekly basis.
The 12-week qualifying period is triggered by working in the same job with the same hirer for 12 calendar weeks, whereby a calendar week will comprise any period of 7 days starting with the first day of an assignment. By way of example, where an agency worker begins work for you mid-week, all work done up to and including the following Monday will count as one calendar week.
Although the qualifying period can be broken where there is a gap between assignments, or even a move to a new assignment, in some cases a break will merely pause the clock that will then continue to tick when the agency worker returns. In other cases the clock will continue to tick even during the break.
The types of break that will pause the 12-week qualifying clock include:
- A break for any reason where this is no more than 6 calendar weeks and the agency worker returns to the same role with the same hirer
- A break of up to 28 weeks where the agency worker is incapable of work due to sickness or injury
- Any break where the agency worker is taking leave to which they are entitled, including annual leave
- A break up to 28 calendar weeks where the agency worker is required to perform jury service
- A break due to a regular, planned shutdown of the workplace by the hirer, for example, at Christmas
- A break due to strike, lock out or industrial action at the hirer’s workplace
The clock will continue to tick for breaks due to pregnancy, childbirth or maternity up to 26 weeks after childbirth, or any breaks where the agency worker is taking maternity, adoption or paternity leave to which they are entitled. However, the clock will only continue to tick for the originally intended duration of the assignment, or the likely duration of the assignment, whichever is longer.
Typically, the reasons for the qualifying clock to reset to zero include:
- Where an agency worker begins a new assignment with a new hirer
- Where an agency worker remains with the same hirer but is no longer in the same role, although the new role must be substantially different
- Where there is a break between assignments with the same hirer of more than 6 calendar weeks
Consequences of breaching the Agency Workers Regulations
Failure to comply with the Agency Workers Regulations 2010 can lead to significant consequences. If an agency worker believes they are not receiving the same treatment as a comparable directly employed worker, they have the right to bring a claim before an employment tribunal.
Both the temporary work agency and the hirer may be held jointly or individually liable for any lack of equal treatment. However, the temporary work agency can defend itself if it demonstrates that it took reasonable steps to obtain accurate information from the hirer regarding basic working and employment conditions and subsequently treated the agency worker appropriately. In such cases, liability will shift to the end hirer, who will be solely responsible for any breach arising from failure to provide accurate or sufficient information to the agency.
To avoid liability, it is essential for end hirers to provide the temporary work agency with up-to-date and precise details about their terms and conditions. This ensures that agency workers are treated fairly and receive the same entitlements as directly recruited employees after the 12-week qualifying period.
Additionally, the regulations contain strict anti-avoidance provisions to prevent deliberate attempts to deny agency workers their entitlements. Structuring assignments to circumvent the 12-week qualifying period can result in a penalty of up to £5,000. Employers must ensure compliance to avoid these penalties and maintain fair treatment for all workers.
What are the Agency Workers (Amendment) Regulations 2019?
The Agency Workers (Amendment) Regulations 2019 were introduced as part of the Government’s Good Work Plan, which aimed to strengthen employment rights and improve working conditions in the UK. This followed an independent review of modern working practices, also known as the Taylor Review.
A key element of the amendment was the removal of the “Swedish derogation” under the Agency Workers Regulations 2010, effective from 6 April 2020. Previously, the derogation allowed temporary work agencies to offer agency workers permanent contracts with pay between assignments. However, this often resulted in workers receiving lower pay compared to directly employed staff after 12 weeks in the same role.
Under the amended regulations, agency workers can no longer be excluded from the equal pay provisions after 12 weeks of continuous work. All agency workers must now receive the same pay as permanent employees performing comparable roles once they reach the 12-week qualifying period, regardless of whether they are paid between assignments.
The aim of the repeal was to eliminate unfair treatment and ensure equal pay for equal work, providing greater transparency and fairness for agency workers. Agencies are now prohibited from offering contracts that circumvent these equal pay rights, improving workers’ ability to make informed decisions about their employment arrangements.
End Hirers must ensure compliance with these regulations to avoid legal risks, including claims for unequal treatment or pay discrimination.
How can Parasol support you?
When working with Parasol, we will contact you and ask that you to provide us with detailed information with regards to the assignment. This will be in the form of a questionnaire, which we will ask you to return in advance of the 12th week of the worker being employed by Parasol.
The form requests details such as an equivalent salary or earnings potential for an individual employed by your business (comparator details), and who is undertaking work that is deemed to be the equivalent role.
If there are comparator details, then we will check to ensure that the rate being paid for the services of the Parasol employee (at least) matches that of the comparator, should this not be the case then we will need to request an uplift in the hourly or daily rate for the employee to comply with the legislation.
Should there be no equivalent role within the business then we will still need to confirm this in writing, so that we can keep update the Parasol employees’ record. Get in touch with the team here to get started.
