The controversial Agency Workers Regulations hit the headlines again this week, after David Cameron intimated that he was seeking legal advice on how to dilute them, only weeks before the legislation is due to come into force on 1 October.
According to the Daily Telegraph, the Prime Minister became concerned that the new laws could have a negative impact on the UK’s fragile economy, after hiring EU law expert Martin Howe QC to advise him.
As a result, he is now exploring whether to remove some of the provisions laid down by the Department of Business, Innovation and Skills on implementing the European directive. One option dubbed the "Armaggedon tactic" would be to refuse to implement it at all, but this would likely result in multi-million pound fines.
But critics have dismissed Cameon’s reported stance as simply amounting to politicking and empty words, believing there is little can be done about the Regulations at this late stage anyway.
Whatever the outcome, however, Thomas Bourne and Karen Plumbley-Jones, lawyers at Bond Pearce LLP, believe that the legislation constitutes one of the biggest changes to employment law this year.
They indicate that the regulations will provide temporary workers with basic working and employment conditions that are no less favourable than those of permanent employees. But with an estimated 1.3 million such workers in the UK, the situation will inevitably have a big impact on employers. Their view is this:
Basically, there are two sets of rights. The first arises on day one of an assignment and includes equal access to a company’s facilities such as the staff canteen, creche and transport services. It also includes the right to know about permanent job vacancies.
Workers rights
The more significant set of rights only kick in after 12 weeks, however, and include equal pay, working time, holidays and so on. Pregnant workers also get equal rights in respect of health and safety and paid time off for ante-natal appointments.
The 12-week timeframe is worked out in a relatively complex way, but it’s probably easiest to get the gist of the calculation by imagining a stop watch that ticks from 0 to 12. The clock starts ticking on day one of the assignment.
But there are certain events that will cause it to reset, for example, if a worker leaves the company, changes assignments to something completely different or, indeed, if there is a pause of six weeks or more where they move to another company and then return to take up the same role.
Other events will simply pause the clock such as annual and sickness leave or jury service, but it will carry on ticking as soon as they return. In other cases such as pregnancy, childbirth and parental leave, the clock will actually keep ticking as before and keep on going towards 12.
It has been reported that one in six companies plan to sack their temps after 11 weeks in order to avoid paying them the same as permanent employees, but it will simply not be that easy to flout these new laws. Some very comprehensive anti-avoidance provisions in the Regulations are designed to prevent exactly that sort of action.
Essentially, if it looks like an assignment is structured to get around the Regulations, a worker could take a claim to an Employment Tribunal. If they are successful, they will be automatically entitled to equal rights at the point equivalent to 12 weeks of service to their employer.
Of course, there may be some situations in which employers will need to move workers between jobs, but they will need to be very careful how they justify that. There is a hefty fine of up to £5,000 if the provisions are breached.
Be prepared
The Government believes that the annual cost of this new legislation is going to be £1.5 billion and, in the current economic climate, this is an unwelcome statistic. But it’s important to remember that employers that don’t currently use large numbers of agency workers or who pay them the same or similar rates to permanent staff are unlikely to be greatly affected by the Regulations anyway.
For those employers that will see a heavier impact, however, there are a number of options. These include setting up a bank of temporary staff that fall outside the Regulations, outsourcing work currently done by agency workers, using zero hours contracts or increasing the availability of overtime to existing personnel.
There is also a specific get-out clause in the Regulations known as the ‘Swedish derogation’. What this means is that, if a worker is directly employed by an agency and paid between assignments, employers won’t have to pay them at the same rate as permanent staff.
What employers need to do now is taking a really good look at their permanent terms and conditions of employment as well as evaluating how reliant they are on agency workers so that they can get a feel for the impact that the Regulations are likely to have.
Secondly, they need to talk to the agencies that supply their workers to understand their take on the situation and how they plan to deal with it. They should also look at their terms of supply with the agencies to make sure that any liabilities arising out of a breach of the Regulations will be sensibly apportioned.
As long as employers plan sensibly and think through this new legislation, however, there shouldn’t be too much of a negative impact. While this is not a good time to bring in a new law that will increase costs for retailers in particular, it will still be possible to have a flexible workforce in place as long as they are prepared.
For a more detailed discussion of this new legislation, please click
here.
Thomas Bourne is an associate and Karen Plumbley-Jones is a practice development lawyer at Bond Pearce LLP.
