Employment Knowhow: Agency workers

Agency workers, typically, register with either an employment agency or an employment business.

An employment agency finds work for work-seekers who are then directly employed and paid by the hirer. Once an employment agency has placed an agency worker with a hirer their relationship with the agency worker usually ends.  

By contrast an employment business will engage a work-seeker in order to place them with another organisation, often as a temporary worker (a ‘temp’). At that point various relationships come into play – a relationship continues to exist between the agency worker and the agency (with the agency usually for example being responsible for paying their wages), between the agency worker and the hirer, and between the agency and the hirer organisation.

Agency workers can provide many benefits to hiring organisations – they can effectively fill short-term skills gaps, and provide an enormous amount of flexibility in terms of staffing levels. This is, however, a heavily regulated area, and it is important that employers understand the responsibilities and obligations that come with hiring agency workers.

The Agency Worker Regulations 2010

Since the introduction of the Agency Worker Regulations 2010, agency workers supplied by an employment business to an end hirer have been guaranteed various rights in respect of their terms and conditions, including:

  • From day 1 of their engagement by a hirer organisation, the right of access to both collective facilities (such as a canteen or staff room) and to information about employment vacancies at the hirer.
  • After a period of 12 continuous weeks with a hirer organisation in the same role, the right to the same pay and other basic working and employment conditions as an equivalent permanent staff member.

Basic working and employment conditions are the relevant terms and conditions which the agency worker would have been entitled to under their contract if they had been recruited as an employee or a worker. These include terms such as pay, annual leave, rest breaks and duration of working time.

The Agency Workers Regulation Guidance produced by the Department of Business, Energy & Industrial Strategy explains that pay includes basic pay, overtime pay, shift or unsocial hours allowances, risk payments for hazardous duties, payment for annual leave, bonuses or commission payments which are directly attributable to the amount or quality of work done by the individual. The Guidance also sets out a list of what is excluded from the definition of “pay”. This includes, amongst other things, occupational sick pay, occupational maternity, paternity or adoption pay, redundancy pay and bonuses which are not directly linked to the contribution of an individual such as a flat rate bonus given to all those directly recruited to encourage loyalty or long term service.

The Regulations do not require the integration of agency workers into performance appraisal systems which apply to someone directly recruited. The Guidance states that where an agency worker qualifies for equal treatment in respect of a bonus that would normally be calculated on the basis of a performance appraisal system, alternative approaches could include creating a simpler system to appraise agency workers and using clear objectives for the assignment to form the basis of the appraisal.

Although agency workers have a day one right to collective facilities and amenities, this does not mean that agency workers will be given “enhanced” access rights, for example where access to childcare or medical facilities involves joining a waiting list, the agency workers would be able to join the list and would not be given an automatic right to have this facility.

Other protections for agency workers

Agency workers are also protected by a number of other more general rights. They are covered by the Equality Act 2010, and therefore protected in the workplace from discrimination on the basis of a protected characteristic (see Discrimination). They have the protections of the Working Time Regulations (see Working Time Regulations) from the outset of any engagement, and they are eligible for National Minimum Wage (see National Minimum Wage). Agency workers are also covered by the rules relating to pensions auto-enrolment.

This page was updated on the 1st August 2018.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of October 24, 2018.