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Stuart Lauchlan

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Agency Workers Regulations: Is your HR house in order?

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The Agency Workers Regulations kicked in on Saturday 1 October, giving temporary agency workers the same basic working and employment rights as full time staff after 12 weeks in a role. 

This applies to pay, working hours, overtime, holidays, rest periods, access to vacancies and to other facilities. 
 
With the UK reliant on large numbers of temporary workers, this radical shakeup of the law is set to impact on vast numbers of UK organisations.  But  a recent study for the job agencies’ trade body, the Recruitment and Employment Confederation, revealed that nationally only one in ten employers was prepared for the law.
 
These conditions include the same basic hourly pay rate, overtime, shift allowances, unsocial hours’ premiums, payments for difficult or dangerous duties, lunch vouchers, bonuses for the quality and quantity of work, rest breaks and annual leave allowance.
 
But Agency workers will still not have rights to claim unfair dismissal, redundancy pay or maternity leave, or be entitled to occupational sick pay, company pension schemes, financial participation schemes and bonus payments based on organisational or company performance. This is because these are considered a reflection of the long-term relationship between an employee and employer .
 
Day one changes
 
In fact while the focus has been on the twelve week mark when the main benefits kick in, there are some benefits which agency workers will be entitled to from day one of a job, such as using existing collective facilities such as a crèche and childcare, the canteen and transport. From day one, employers must also ensure that agency workers are made aware of vacancies that arise in the business.
 
Not adhering the new rules could prove costly for errant busineses. Workplace relations expert Acas warns that firms could face a fine up to £5,000 from an Employment Tribunal if they break the new law – and this would be multiplied by each temp found to have been wronged.  
 
“Businesses really need to make sure that they have a handle on these changes. It’s not something to think about down the line and get it wrong, as it can be costly to your business,” warned John Taylor, Acas Chief Executive. “Some employers may try to get round the regulations by hiring and rehiring temps on a succession of shorter periods. But they need to be careful of the many provisos within the new law. We would always urge employers to take a fair approach as the basis for any workplace relations.”  
 
Employment Tribunals will be able to order compensation without any limit in cases where the same employment conditions aren’t provided after 12 weeks. Employers who deliberately try to avoid the Regulations by, for example, rotating temps between different roles or taking them on under a series of short assignments, will be liable for an additional penalty of up to £5,000.
 
“These penalties are for each individual agency worker you take on, if you do not get your house in order before the beginning of October, the financial implications could be serious,” said James Wilders from Dickinson Dees LLP. “All staff records must be kept up to date and temporary staff carefully monitored. It is advisable to produce an ‘introduction pack’ setting-out clearly and concisely what agency workers can expect from their employment from the outset.”
 
SMEs take the hit
 
Wilders predicts that SME businesses could be particularly caught out by the new rules. “Small businesses look for flexibility and for costs savings by employing temporary staff. This is no longer the case. Soon the costs of employing agency workers will be equal to having permanent staff on board,” he warned. 
 
“By their very nature, the majority of SMEs do not have a dedicated HR team. It is hard to monitor exactly how long individual agency workers have been in work, particularly if they have been supplied by different agencies. Managers must make a concerted effort to regulate their temporary staff carefully.”
 
Some critics have suggested that the new rules will in fact make life more difficult for some organisations who are dependent on using agency staff. “Despite continued regulatory change, organisations across the UK are increasingly reliant on agency workers to carry out business critical processes,” argued  Neil Owen, Director of Robert Half's London operations. “Areas such as finance, operations management and IT have experienced a steady increase in hiring levels over the past 12 months for temporary and interim staff. Our research shows that in London alone, 44% of finance and accounting departments have hired between 1-15 temporary staff, with 49% of companies planning to use the same number over the next 12 months.
 
“With the challenging business environment amidst continued global economic uncertainty, some hiring managers are taking advantage of the knowledge and skills that temporary staff can bring to a company’s bottom line. By continuing to capitalise on the readily available and highly trained temporary market, businesses can adjust more easily and quickly to workload variations, and bring in specialists with the required experiences to run particular programmes.”
 
You've had the time to prepare
 
But Michael Bradshaw, Partner at Charles Russell, said the new rules will benefit certain groups of individuals. “The changes could benefit a variety of different people, from expectant mothers through to those who could now be entitled to end of year calendar bonuses,” he said.   “The first possible 12 week qualifying period will be completed by 24 December 2011, which for some employers will mean that agency workers become entitled to equal treatment on pay just in time for this calendar year’s bonuses.” 
 
Bradshaw added:  “Agency workers who are pregnant or who are new mothers who have satisfied the 12 week qualifying period will have the right to reasonable paid time off for antenatal appointments and the right to temporary changes to their duties or alternative work, as well as paid suspensions, due to health and safety risks.”
 
But there is also a case to suggest that any firm that has not readied itself for the changes has only itself to blame. “The EU Directive that necessitated implementation of the Agency Workers Regulations was published in late 2008,” notes Alex Bearman, Partner in the Employment practice at Russell-Cooke LLP. “In fact, the first government consultation period closed as long ago as 31 July 2009.  Given this long lead in period, many employers who may or will be affected by these Regulations will have already taken steps to prepare.
 
“Employers that use agency workers and who have not already prepared for the new Regulations should prepare now. Otherwise, they will risk being one of the first employers to be taken to an employment tribunal by agency workers who are looking to enforce their new found rights. “
 
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