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 AWR gives agency workers the right to equal treatment after 12 weeks in a role. This includes pay, working conditions and access to facilities, although it does not apply in the same way to contractors working through their own limited company.
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 once an agency worker has completed 12 weeks in the same role with the same hirer, regardless of how many hours they work in a day.
There are two main exceptions to the AWR:
a) The first applies when the end-hirer, or recruitment agency, 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 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, recreational areas, parking, food and drink (vending machines, etc.) and equipment.
- Equal pay arrangements, including rates of pay, overtime and bonuses that are directly attributable to the work done.
- 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.
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 pay)
- Share schemes
- Redundancy payments
- Paternity and maternity pay
- Bonus schemes not directly linked to the work performed
- Bonuses that are non-cash (e.g. prizes or experiences)
- Advances to salaries
- Loans
- 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, the agency may need to conduct a risk assessment to ensure there are no health and safety concerns.
- If adjustments are not made to ensure the working environment is safe, the agency may need to seek alternative work which is identically paid.
- Recruitment agencies must record details of each role to remain compliant with relevant legislation.
- Agencies must ask the end-hirer about basic working conditions and pay where the assignment is expected to exceed 12 weeks.
The End-Hirer
- If a risk assessment is carried out, the end-hirer is required to make the necessary changes to ensure the workplace is suitable.
- End-hirers are required to keep recruitment agencies informed of terms and conditions.
- It is the end-hirer’s responsibility to ensure access to Day 1 rights.
- Where assignments are expected to exceed 12 weeks, the end-hirer must provide accurate information to support equal treatment.
The Agency Worker
- Agency workers must provide their recruitment agency with a record of employment history to help determine when AWR applies.
The ‘Swedish derogation’ model
As we know, there had been historical cases where employers had taken advantage of temporary workers because they could treat them less favourably than permanent staff.
The ‘Swedish derogation’ was an arrangement where recruitment agencies employed workers directly, allowing them to avoid equal pay provisions in some cases.
In April 2020, following the Taylor Review of Modern Working Practices, the ‘Swedish derogation’ model was abolished. This removed the exemption and strengthened equal pay rights for agency workers.
What should agency workers do if they are not being treated fairly?
Once you have completed 12 weeks on your assignment, you are entitled to ask your recruitment agency how your pay and working conditions have been determined.
If your agency does not reply within 28 days, you are entitled to take your concerns directly to your end hirer.
If you still believe you are not being treated fairly under the Agency Workers Regulations, it may be necessary to make a claim through an Employment Tribunal.
Further reading: Umbrella companies explained | Mini umbrella company fraud