Agency Workers Regulations

What is the AWR?

The Agency Workers Regulations (AWR), sometimes known as the Agency Workers Directive, is a new piece of legislation that is due to come into effect in October 2011. The aim of the AWR is to protect vulnerable workers from exploitation and ensure them the same basic employment conditions as their permanent equivalents after 12 weeks of service – mainly the right to the same pay, working hours and holidays.

Who, or what, are agency workers?

The traditional view of agency workers seems to be blue collar production line workers such as those caught up in the row between BMW and the union Unite last year (which, although you can trace the beginnings of the AWR back to 2000, led to a marked step change towards its introduction). However, an agency worker can range from those working in agriculture and food production industries to temporary secretarial staff, or from jobbing actors through to highly skilled IT consultants or engineers working on North Sea oil rigs.

The official definition of an agency worker is a person who has a contract of employment with a temporary work agency and is supplied by them to work temporally for, and under the supervision of, a hirer or client. They can also be known as temps, interims, contractors, freelancers or flexible workers and in the more heated moments of the AWR debate, as vulnerable workers.

Knowledge is needed

Like a lot of the legislation introduced in recent years to the temporary workers market (IR35, MSC etc), the legislation has not made a distinction between these two ends of the agency worker spectrum. The vulnerable agency workers who deserve the protection of the AWR, and the highly skilled, high-earning contractors who provide their services to end-users via a recruiter. It’s fair to say that most of the highly skilled, high paid agency workers do not see themselves as vulnerable or in need/want of protection.

Incidentally, if you’re benefiting from the services of a temporary worker operating as their own Limited Company, they are not classed as an agency worker under the AWR legislation.

How does it all work with pay & bonuses?

It may seem obvious but, for the record, the AWR legislation defines ‘pay’ as the basic payment received for work undertaken; holiday pay, overtime, shift allowances, bonuses, commission and stamps given with a monetary value, e.g. luncheon vouchers.

Bonuses are a slightly tricky one because under AWR, bonuses that are given to encourage loyalty, or for other reasons not directly related to the work done, will not be included.

Also worth noting here is the Swedish derogation, a very grand sounding name for an opt-out clause negotiated by the Swedish delegation when the AWR was debated at EU level. It means that AWR rights no longer exist where agency workers are employed on a permanent basis by an agency and receive pay between assignments.

Basic employment conditions

After the 12 week qualifying period is over, under the AWR, agency workers will also be entitled to the same basic employment conditions as their comparable permanent equivalent.

In many debates this gets referred to as ‘equal treatment’ although equal treatment is not quite the same thing. The legislation is framed so that workers who would not previously have been afforded these rights will now do so. But is does not mean that those agency workers who enjoy better conditions have to be treated equally. For example, if you pay your agency workers a higher rate than a comparable permanent employee, this won’t be affected under the legislation.

What’s included in the AWR?

When referring to conditions, the AWR is referring to:

• Pay
• Holidays
• Hours of work
• Night work
• Rest periods and breaks
• The right to hear about vacant posts within the business
• The right to use collective facilities such as the a canteen, childcare facilities or transport services

What’s excluded from the AWR?

The main employment conditions that are excluded from the AWR legislation are:

• Occupational sick pay
• Pensions
• Parental leave
• Redundancy payments
• Share schemes
• Long service award schemes

Comparable employees

Another confusing term we’ve come across during the AWR debate has been ‘comparable employee,’ and this lies at the heart of the AWR. Also known as the permanent equivalent, the comparable employee is the person in permanent employment with the hirer doing the same job as the agency worker and will therefore be the benchmark in any AWR hearing.

As a rule of thumb, the agency worker will be entitled to the same basic employment conditions as the comparable employee assuming they are both being supervised and managed by the hirer, are doing the same basic work and usually work in the same place.