If you hire agency workers, you must ensure that they have they can access your facilities (such as canteen, childcare facilities, etc) and can access information on your job vacancies from the first day of their assignment. It should be noted that these initial rights are the absolute liability of the hirer.
The equal treatment entitlements relate to pay and other basic working conditions (annual leave, rest breaks etc) and come into effect after an agency worker completes a 12 week qualifying period in the same job with the same hirer. It is not retrospective and for those agency workers already on assignment, the 12 week qualifying period will start from 1 October 2011.
- Genuinely Self-Employed (in business on their own account).
- Limited company Contractors who are outside of IR35.
- Umbrella PAYE workers (unless they are paid in accordance with Regulation 10 of AWR i.e. “Swedish Derogation” or “Pay Between Assignments” model).
If you are an employer and hire temporary agency workers through a temporary work agency, you should provide your agency with up to date information on your terms and conditions so that they can ensure that an agency worker receives the correct equal treatment, as if they had been recruited directly, after 12 weeks in the same job. You are responsible for ensuring that all agency workers can access your facilities and are able to view information on your job vacancies from the first day of their assignment with you.
From 1 October 2011, after you have worked in the same job for 12 weeks, you will qualify for equal treatment in respect of pay and basic working conditions. You can accumulate these weeks even if you only work a few hours a week. Your temporary work agency is likely to ask for details of your work history to help establish when you are entitled to equal treatment (separate guidance is available for agency workers on direct.gov website).
If you are involved in the supply of temporary agency workers (including Umbrella payment companies), you need to ask the hirer for information about pay and basic working conditions (when it is clear that the agency worker will be in the same job with the same hirer for more than 12 weeks) so that they are treated as if they had been directly recruited to the job.
The Qualifying Clock
Most commonly it will be because 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. The circumstances in which an agency worker is regarded as no longer working in the same role are considered below
If there is a break between assignments with the same hirer of more than 6 weeks (which is not one which ‘pauses’ the clock or during which it continues to ‘tick’)
- A break for any reason where the break is no more than six calendar weeks and the agency worker returns to the same role with the same hirer
- A break of up to 28 weeks because the agency worker is incapable of work because of sickness or injury
- Any break which is for the purpose of taking leave to which the agency worker is entitled, including annual leave
- A break up to 28 calendar weeks to allow the agency worker to perform jury service
- A break caused by a regular and planned shutdown of the workplace by the hirer (for example at Christmas)
- A break caused by a strike, lock out or other industrial action at the hirer’s establishment
- Breaks due to pregnancy, childbirth or maternity which take place during pregnancy and up to 26 weeks after childbirth.
- Any breaks due to the worker taking maternity leave, adoption leave or paternity leave.
In each of these cases the clock will continue to tick for the originally intended duration of the assignment, or the likely duration of the assignment (whichever is longer).
Pay
Having completed the 12 week qualifying period, the agency worker is entitled to the same basic terms and conditions that he or she would have received if recruited directly. This includes terms and conditions relating to key elements of pay. Pay for these purposes means sums of money paid to the worker in connection with the worker’s employment. This guide explains what is included and excluded in the definition of ‘pay’.
- Basic pay based on the annual salary an agency worker would have received if recruited directly (usually converted into hourly or daily rate, taking into account any pay increments)
- Overtime payments, subject to any requirements regarding the number of qualifying hours
- Shift/unsocial hours allowances, risk payments for hazardous duties
- Payment for annual leave (any entitlement above the statutory minimum of 5.6 weeks can be added to the hourly or daily rate) – to avoid confusion this should be identified separately on the agency worker’s payslip.
- Bonus or commission payments directly attributable to the amount or quality of the work done by the individual. This can include commission linked to sales or production targets and payments related to quality of personal performance (see sections below on bonuses linked to personal performance and performance appraisal systems). This might also include non-contractual payments which have been paid with such regularity that they are a matter of custom and practice.
- Vouchers or stamps which have monetary value and are not “salary sacrifice schemes” – e.g. luncheon vouchers, child care vouchers
- Occupational sick pay (the Regulations do not affect an agency worker’s statutory entitlement to statutory sick pay)
- Occupational pensions (agency workers will be covered by new automatic pension enrolment which will be phased in from October 2012 – see website for more details www.dwp.gov.uk/policy/pensions-reform
- Occupational maternity, paternity or adoption pay (the Regulations do not affect an agency worker’s statutory entitlements)
- Redundancy pay (statutory and contractual)
- Notice pay (statutory and contractual linked to loss of employment)
- Payment for time off for Trade Union duties
- Guarantee payments as they apply to directly recruited staff if laid off
- Advances in pay or loans e.g. for season tickets
- Expenses such as accommodation and travel expenses
- Payments or rewards linked to financial participation schemes such as share ownership schemes, phantom share schemes
- Overtime or similar payments where the agency worker has not fulfilled qualifying conditions required of someone directly recruited. For example, an agency worker would have to be doing work over and above standard hours to qualify for overtime, not just working a shift that permanent staff tend to work on an overtime basis
- The majority of benefits in kind (see reference to vouchers in stamps which have a monetary value and are included on previous page), given as an incentive or reward for long-service, for example, where Building Society staff may be given a reduced rate mortgage, employer funded training allowances
- Any payments that require an eligibility period of employment/service, if not met by the agency worker (same treatment as if directly recruited) or if the agency worker is no longer on assignment when the bonus is paid (if the same applies to those directly recruited i.e. no longer working for the hirer)
- Bonuses which are not directly linked to the contribution of the individual – e.g. a flat rate bonus that is given to all direct recruits to encourage loyalty or long term service
- Additional discretionary, non-contractual bonuses, as long as these payments are not made with such regularity that they have become custom and practice.
This is a complex issue and one that will become clearer only once the employment tribunals start to consider liability for breach of these Regulations. The temporary work agency will initially be liable for a breach in the provision of equal treatment. However, the Regulations and UK Government guidance are clear that all parties in the supply chain, including the hirer and all TWA’s (including Umbrella companies) will be liable for a breach to the extent that they are deemed responsible for that breach.
It is possible that the temporary work agency will not be liable for a breach where it can show that:
- It acted reasonably in obtaining or trying to obtain the required information from the hirer, or the temporary work agency in the next tier up the supply chain; and
- It acted reasonably on information received from the hirer, or other temporary work agency to determine equal treatment; and,
- Based on the information received, it extended the same basic working and employment conditions to the agency worker
The Regulations make it clear that where more than one temporary work agency is party to a claim the employment tribunal will have regard to the extent to which each temporary work agency will be responsible for the breach.
In certain cases the hirer may be liable, particularly if they have refused to provide accurate comparator information.
The hirer and all TWA’s should not assume that responsibility for providing equal treatment will fall to the TWA at the bottom of the supply chain that actually pays the agency worker. This is not necessarily the case.
As a payroll provider for your temporary workers, we intend to work closely with your business to ensure a compliant and panic free approach to the AWR implementation
Information we may need:
1. Assignment confirmation details.
2. Notice if/when the assignment looks like going past the 12 week period and what this will mean to basic work conditions.
3. Information completing on our comparator checklist to ensure the correct procedures will be followed.
Overall, the flow of information between hirers, temporary work agencies and Umbrella payroll companies, is the key aspect in ensuring that all matters can be dealt with quickly and reasonably in the event of any information requests from agency workers. In most cases a common sense approach and communication between all parties will be able to resolve any potential issues in an amicable fashion, thus reducing the likelihood of tribunal cases.
We have therefore ensured that our terms of business have been updated to clarify what, if any, comparator information needs to be passed down through the supply chain.
If you have any questions relating to any aspect of the AWR 2010, please contact us on:
Telephone: 01226 733209
Email: info@orbitalservices.co.uk