The Agency Workers Regulations (AWR) have completed their passage through Parliament and will come into force on 1 October 2011. Details of how the Government intends to proceed with developing guidance on the AWR are yet to be announced.

The main purpose of the AWR is to give temporary agency workers parity in pay and employment conditions with what they would have been entitled to had they been hired directly into the same job.

Under the AWR 'parity' relates only to basic working and employment conditions of temporary agency workers (eg pay, overtime and shift allowances) and does not extend to sick pay and participation in pension schemes.

The AWR does not affect the employment status of temporary agency workers and therefore the AWR does not give the workers rights to claim unfair dismissal or redundancy pay.

Click on this link to download our current summary on the AWR.

The EU's Agency Workers Directive (AWD) was approved by the EU Parliament in October 2008 and was published in its second format in December 2009. The AWD presents a challenge for the recruitment industry and companies alike as it puts temporary agency workers on equal terms with permanent workers with regard to pay and conditions.

It was first drafted in 2000 when Greece (which had virtually outlawed temporary agency working) chaired the principal EU meetings. In previous years, the Directive was debated on and off in the EU, and representations against it were made by UK business organisations to the UK Government and to the European Commission.

The UK will be affected by the Directive more so than any other country in the EU because it has the largest number of temporary agency workers and temporary recruitment agencies than any other EU country. Member countries of the EU are required to implement the AWD by 5th December 2011.

The Directive does allow for derogations by national governments if there is agreement between the social partners in employment, i.e. unions and employers. In the UK, the Government announced such an agreement in May 2008 (brokered between the Confederation of British Industry [CBI] and the Trades Union Congress [TUC]), stating that agency workers would have equal rights after 12 weeks of their employment, with the exception of regulations regarding sick pay and pensions.

For much of 2009, the Government was in consultation with industry representatives discussing the detail of the Directive, as some points have required clarification; for example, what part of a remuneration package should be regarded as 'pay', whether 12 weeks refers to 4 months or 12 consecutive weeks, what definition could be applied to a 'break' between assignments and when a week technically starts.

The big question that remains is how the regulations governing the implementation of the AWD will be worded. At the time this report was published (January 2010), some of the details had still not been completely agreed.:

• how the word 'pay' will be defined
• how the regulations will affect the fees that are paid to a recruitment firm when a temporary/contract worker becomes a permanent one
• how the regulations will affect those who work on a regular basis for several different employers
• limiting the impact of the regulations on specific sectors where repeat assignments are common, such as in driving and social care
• protecting the interests of recruitment firms recruiting high salaried personnel, as well as interim management firms, by clarifying issues relating to self-employment
• ensuring a level playing field for public- and private-sector suppliers in relation to the new regulations.

The final version of the regulation is expected during the first quarter of 2010.

Ahead of the Government publishing its official consultation, the REC published the initial findings and recommendations of the Agency Work Commission.

Leading business organisations such as the CBI, FSB, IOD, Professional Contractors Group, CIPD and the British Chambers of Commerce provided input as well as the TUC thoughts from a workers' perspective.

The aim of the Commission was to make practical recommendations on the UK implementation ahead of the Government publishing its official consultation. The current economic climate makes it even more important to get this right first time to ensure that the new regulations do nothing to hinder the creation of job opportunities.

Recommendation 1
The scope of equal treatment should be limited to basic salary and other basic statutory rights

• A simple definition of what equal treatment covers is essential in order to avoid the kind of uncertainty, bureaucracy and cost that would impact on the viability of agency work in the UK.
• The definition of pay should be limited to a basic hourly rate. Occupational benefits and financial participation schemes that vary from one user enterprise to another should be excluded.
• Agency workers are already entitled to the statutory holiday pay which is rising to 28 days.
• Any extension of holiday pay to equivalents in the user enterprise would add bureaucracy and complexity with agencies having to establish different holiday entitlements for each temporary assignment.

Recommendation 2
Equal treatment must be easy to establish

• Where no such formal provisions governing pay or working time exist in the user enterprise, it is extremely difficult to find a basis on which equal treatment can be established.
• The text of the EU Directive does not refer to comparables. Therefore, equal treatment should not be established on the basis of an existing comparable worker, a predecessor to that role or a 'hypothetical' comparable worker.
• Equal treatment for temporary staff after 12 weeks of an assignment must be established with reference to what they would expect if recruited directly by the employer to occupy the same job. 

Recommendation 3
The 12 weeks qualifying period must be easy to administer

• Ensuring that the 12 weeks period is easy to administer will avoid unnecessary bureaucracy and will limit the number of assignments that are terminated prematurely.
• There should be recognition for a genuine break between assignments. The Commission recommends that a break of 4 weeks should constitute a legitimate break.
• Although temporary workers in sectors such as social care and supply teaching may only do one or two days a week, the qualifying period should be 12 calendar weeks regardless of the amount of work carried out during those weeks.
• The 12 week period should apply to a specific job in a specific location and unit rather than to any role within the user enterprise. 

Recommendation 4
Liability must rest with the end user as well as the agency

• The specific responsibilities of end users and recruitment agencies must be made clear in the regulations.
• The agency should be expected to take reasonable steps to establish equal treatment but should not be held responsible if that information turns out to be incorrect. There must be an element of compulsion on the user enterprise to provide relevant information to the agency.
• Liability issues linked to other employment structures such as umbrella companies and master and neutral vendors will need to be considered in detail.

Recommendation 5
Measures to limit the increase in employment tribunals must be promoted

• Enforcing equal treatment should be through the Employment Tribunal System. However, informal ways of resolving disputes before a case reaches an Employment Tribunal should be encouraged (although the regulations should not be prescriptive on this).
• The Commission will actively work with ACAS and TUC to propose informal methods of resolving disputes around equal treatment. The key is to provide agencies and employers with a range of options rather than one prescriptive formula. 

Recommendation 6
The provision of the directive should be limited to individual workers

• Professional flexible workers such as interim managers and IT contractors supplied through limited companies/umbrella arrangements are often paid more than permanent workers. They are not the individuals that the legislation is aiming to protect and should be excluded in order to avoid unnecessary bureaucracy for agencies and user enterprises.
• The Commission proposes that Personal Service Companies be excluded as they are providers of business services and not engaged as workers.
• The recruitment industry will continue to support initiatives to address instances of bogus self-employment. 

Recommendation 7
UK regulations must support legitimate means of derogating from the principle of equal treatment

• The Commission welcomes the option of being able to form workplace agreements which would avoid the bureaucracy of establishing equal treatment for each assignment.
• Agencies that employ their temporary workers directly and pay them between assignments should also derogate from the principle of equal treatment.
• Welfare to Work services should be excluded. 

Recommendation 8
A clear communication strategy is essential for effective implementation

• Proceeding with implementing the Directive without clear communication and understanding will result in confusion and a massive increase in disputes with associated costs for all involved. A comprehensive communication campaign aimed at user enterprises, agencies and job seekers must therefore be a key part of the implementation process.
• There should be a minimum 12 month lead in time between the regulations being published and formal implementation. This will allow for the publication of guidance and the necessary systems to be put in place and end users to be reassured about the application of the Directive. 

Recommendation 9
Implementation must be delayed until October 2011

• The implementation of the regulations should be delayed until October 2011 because of the worsening economic climate. In addition, this will allow for employers and agencies additional time to fully prepare for the new regulations.
• Any eventual economic upturn will be seriously hampered by restrictions on the flexibility of the national workforce.

2009 Updates

The consultation period for the Agency Workders Directive closed on the 11th December 2009, the draft regulations are expected to be released early next year.  For a complete copy of the consultion document, click here Consultation Summary.

Purpose of consultation
This consultation document sets out the Government's proposed approach to implementation of the Agency Workers Directive in the light of our policy consultation earlier this year. It provides a synopsis of responses to the previous consultation, sets out the way in which the Government now intend to proceed, and seeks comments on draft regulations. It sets out the key elements of the Government's proposed approach to who should be covered by the Directive, the definition of pay, holiday entitlement, duration of working time, the 12 weeks qualifying period, how the principle of "equal treatment" should be established, liability for compliance with obligations under the Directive, and dispute resolution. This consultation is seeking views on this approach.

Areas for consultation
This second stage of consultation is specifically seeking views on:

• their proposed response to issues arising from the previous consultation
• whether the draft Regulations (Annex A), effectively reflect their policy intentions as set out in this document
• whether the details of their proposals, as reflected in the draft Regulations, give rise to any particular issues of concern; and
• what practical advice users would welcome in the guidance which will accompany the Regulations.

Response to consultation
Responses to this consultation must be received by Friday 11 December 2009. They can be submitted via e-mail to awdconsultation@bis.gsi.gov.uk or alternatively you can send a consultation response form by letter or fax to: 

Anita Thomas
Agency Workers Directive Policy Team
BIS
Bay 486
1 Victoria Street
London SW1H OET
Tel: 020 7215 5963
Fax: 020 7215 0168

Temporary workers entitlements
Temporary workers currently have entitlements such as 28 days' paid holiday, statutory maternity and sick pay, as well as protection under anti-discrimination and health and safety legislation.

The Directive will provide temporary workers with further additional rights.  In the UK, employment conditions of temporary workers must, during their assignment at a host, be at least the same as those that would apply if they had been recruited directly by that host to occupy the same job. However this equal treatment will only apply after the temporary worker has been in a given job for 12 weeks. There will be anti avoidance measures in the legislation to prevent repeat re-assigning after a period of less then 12 weeks.

Equal treatment will cover basic pay, holidays, notice periods, vocational training and the right to be notified about vacancies. It will not cover access to occupational pension schemes, share option schemes and employer's sick pay arrangements.

Consultation  Period Stage 1
The Department for Business, Enterprise and Regulatory Reform (BERR) is seeking views on the implementation of the TAWD and has subsequently launched a consultation period, 8^th May - 31^st July 2009.

The objective of the consultation period, through feedback, is to identify key concerns and issues which will need to be addressed.   This consultation opens up the debate so that implementation can reflect the real and legitimate interests of agency workers, temporary work agencies and hirers.

BERR are seeking views on who should be covered by the Directive, eg the definition of: pay, holiday entitlement, duration of working time, the 12 weeks qualifying period, how the principle of "equal treatment" should be established, liability for compliance with obligations under the Directive, and dispute resolution.

This is the first stage of the Consultation process, running for 12 weeks until 31 July 2009. Following this, BERR will publish the Government's response and conduct a second stage consultation on draft Regulations, also inviting views on what practical advice users would welcome in the guidance which will accompany the Regulations.

Government series of country-wide AWD consultation events
A series of country-wide events hosted by the Government took place during June and July, to give interested parties an opportunity to discuss the Agency Workers Directive and its implementation in the UK.  One of the main principles underpinning the Agency Workers Directive (AWD) is to give temporary agency workers equal treatment after 12 weeks. This will mean that temporary workers will need to be paid the same and have the same access to holidays, rest breaks, overtime and public holidays.

The next stage of the AWD comes in September when the Government complete their draft paper.