The Agency Workers Regulations (AWR) were introduced in 2010 and came into effect on the 1st of October 2011. Although the legislation is complex, the premise is simple: to protect temporary workers employed through staffing agencies.
The legislation sets out to ensure temporary workers (including umbrella company employees) are not discriminated against and have the same rights in the workplace as permanent employees working in similar positions.
Keep reading, and we’ll explain what the Agency Workers Regulations are in more detail, and how they apply to umbrella company contractors.
What are the Agency Workers Regulations (AWR)?
The government introduced the Agency Workers Regulations (AWR) in 2010 to prevent employers from taking advantage of temporary workers and treating them detrimentally compared to employees in permanent positions. Before the AWR came into effect, employers could get away with paying agency workers less, and the workers themselves had fewer rights than full-time staff. As a result of the AWR, agency workers have far more employment rights.
The AWR came into force on 1st October 2011.
What rights do agency workers have?
Before focusing on the impact of the Agency Workers Regulations, it’s important to understand the rights that employees and agency workers have from the first day on an assignment – whether permanent or temporary.
From the very beginning and first day on a job, employees, including agency workers, are entitled to:
- Full protection from any discriminative behaviour.
- At least the National Minimum Wage (NMW).
- A minimum of at least 5.6 weeks of holiday entitlement.
Employees and workers are also protected by law against anything that they bring to the employer’s attention that could lead to an unfair dismissal, including:
- The right to question and refuse work that puts the worker at any deemed risk or danger.
- Challenging working conditions if they believe they are unsafe.
- Raising concerns over health and safety in the workplace.
If an employee or worker was ever disciplined or dismissed over any of the above, they could well have an unfair dismissal claim. The same applies if the worker believes they are receiving detrimental behaviour from the employer. For example, if the employer suddenly denies overtime immediately after the worker raises a concern.
When do the Agency Workers Regulations (AWR) apply?
The Regulations come into effect as soon as an agency worker has completed 12 weeks in an assignment, regardless of how many hours they work in a day.
There are two main exceptions to the AWR:
a) The first apples when the end-hirer, or recruitment agency, if the customer and is engaging a professional service. For example, if the worker is a doctor or accountant. The AWR does not apply because the professional is unlikely to be working under the recruitment agency’s or end-hirer’s supervision or direction.
b) The second AWR exception applies to professionals in business on their own terms. For example, the AWR does not apply to contractors operating through a personal service company (PSC) because they are considered in business on their own terms and are not employers or workers in the traditional sense. However, the AWR does protect agency workers operating through an intermediary – such as an umbrella company.
What is included for temporary workers under the AWR?
After 12 weeks in a role, equal working conditions as defined in the AWR include:
- Treatment that is entirely equal to employees in full time positions.
- Having access to amenities including a canteen to eat, recreational areas, pick and drop off ones, parking, food and drink (vending machines, etc.) and equipment.
- Equal pay arrangements, including rates of pay, overtime, bonuses, childcare vouchers, etc.
- Access to additional employment information within the organisation the work is being carried out. This must come into effect from the first day on the job (sometimes referred to as the “Day 1 Entitlement”).
- As well as the rights that come under the Working Time Regulations (1998), the temporary worker is entitled to the same working hours and rest periods (compared to permanent employees).
What is not included for temporary workers under the AWR?
The following benefits do not apply to agency workers and are not covered by the Agency Workers Regulations:
- Pension schemes
- Enhanced sick pay (additional benefits on top of statutory sick page)
- Share schemes
- Redundancy payments
- Paternity and maternity pay
- Bonus schemes on offer from the company
- Bonuses that are non-cash (e.g. winning items, being given experiences, etc.)
- Advances to salaries
- Being given a loan
- Any additional type of payment other than the agreed rate
- Access to a company car
The important AWR responsibilities within the supply chain of agency workers
Each party within the supply chain of temporary workers is responsible for several factors to ensure the Agency Workers Regulations are adhered to.
The Temporary Worker’s Agency (sometimes abbreviated to TWA)
- Depending on the role that the agency is placing the worker, they may need to conduct a risk assessment to ensure there are no health and safety concerns. If there are, adjustments may be required.
- If adjustments are not made to ensure the working environment is safe for the agency worker, the agency may need to seek alternative work which is identically paid.
- Recruitment agencies must record all details of the role that every agency worker undertakes to remain compliant with the Gangmasters Act and the Conduct of Employment Agencies and Employment Businesses Act. Records must include a thorough review of the end-hirer, the type of work, location, how long the assignment is, etc.
- Agencies must ask the end-hirer about basic working conditions and pay – assuming the worker is going to be with the same company after 12 weeks.
- If a risk assessment is carried out, the end-hirer is required to make the necessary changes to ensure the workplace is suitable for workers (in regards to health and safety). If the end-hirer is unable to conduct a risk assessment, they must alert the recruitment agency and they may decide to end the professional relationship.
- End-hirers are required to keep recruitment agencies up to date with their terms and conditions – to allow the agency to check workers are being treated fairly, and legally.
- It’s the end-hirers responsibility to ensure all staff have access to equal rights from the first day of their assignment.
- When it’s obvious a worker’s assignment will exceed 12 weeks, the end-hirer is required to provide the recruitment agency with frequent updates to ensure the AWR can be abided by compliantly.
The Agency Worker
- Agency workers must provide their recruitment agency with a record of employment history – to help the agency determine when the AWR should be implemented.
The ‘Swedish derogation’ model
As we know, there had been historical cases where employers had taken advantage of temporary workers because they could get away with treating them poorly when compared to permanent members of staff.
Temporary workers did not have the same employee rights and rights to equal pay (hence the introduction of the AWR). This is where the ‘Swedish derogation’ came into effect.
It was an arrangement where recruitment agencies hired temporary workers directly, rather than acting as a middleman between the end-hirer and the temporary workers. In doing this, recruitment agencies had to pay workers up to 4 weeks between assignments, but only the National Minimum Wage (NMW). In many cases, this undervalued the worker who no longer had access to equal pay rights due to being in permanent employment.
In April 2020 and in response to the Taylor Review of Modern Working Practices, the trade union movement secured a huge victory as the ‘Swedish derogation’ model of employment was outlawed. Not only was this a win for the trade unions, it was a huge win for temporary workers who were seeking short term roles with equal pay and treatment as full time employees.
What should agency workers do if they are not being treated fairly?
Once you have completed 12 weeks on your assignment, you are fully entitled to ask your recruitment agency how they have determined your pay and working conditions – to ensure they’ve been fair in the approach. If your agency does not reply within 28 days, you are entitled to take your concerns directly to your end hirer.
Having contacted your recruitment agency and possibly the end-hirer and you believe you’re not being treated fairly under the Agency Workers Regulations, it may be necessary to claim through an Employment Tribunal.