1. The Agency Workers Regulations Are you ready for 1 October 2011?Seminar for recruiters and other suppliers8 September 2011Bridget Wood, Head of Recruitment sector groupbridget.wood@bllaw.co.uk020 7814 5426 Stephanie Slanickova, Senior solicitorstephanie.slanickova@bllaw.co.uk 020 7814 5422

2. Overview Introduction Who is an agency worker and what is a temporary work agency? Who falls within the scope of the Regulations and who falls outside? What new rights will agency workers have? Who is liable for breaches of the Regulations and what are the penalties? Possible workarounds Implications for end users Implications for recruiters and other suppliers Practical tips for staying ahead Conclusions Any questions 3. Introduction Part-time workers and fixed-term employees already have equal treatment rights under UK Regulations which implement EU Directives The aim of the European Agency Workers Directive was to extend this principle to agency workers The Agency Workers Directive became European law in December 2008 UK to implement within three years 4. Introduction The Agency Workers Regulations 2010 were laid before Parliament on 21 January 2010 The Agency Workers (Amendment) Regulations 2011 were laid before Parliament on 3 August 2011 BIS published revised final guidance on the Regulations on 27 May 2011 - additional guidance for teaching agencies published in August 2011 The BIS Guidance provides important clarification of the Regulations but is not a statement of the law ultimately for courts to interpret 5. Introduction The Agency Workers Regulations give agency workers the right to equal treatment with regards to basic working and employment conditions once they have completed a 12 week qualifying period to be provided by temporary work agencies Day 1 rights to be provided by end users The Regulations come into force on 1 October 2011 6. The Agency Workers Regulations 2010:what the Regulations say Who is an agency worker and what is a "temporary work agency? Who falls within the scope of the Regulations and who falls outside? What are the new rights of agency workers? Who is liable for breaches of the Regulations and what are the penalties? 7. Who is an agency worker?An agency worker: is supplied by a temporary work agency to work temporarily for and under the supervision anddirection of the client/end user (Regulations use term hirerfor client/end user)AND has a contract of employment with the temporary workagency or any other contract with the agency to performwork or services personally (n.b. new definition) 8. What is a temporary work agency? A temporary work agency: supplies individuals to work temporarily for and under thesupervision and direction of hirers/clientsOR pays for, or receives or forwards payment for, the services ofindividuals who are supplied to work temporarily for andunder the supervision and direction of hirers/clients Worker can be an agency worker even if he or she works through an intermediary Agency workers cannot contract out or opt out of the Regulations 9. Who falls within the scope of theRegulations? (examples)Hirers (= clients/end users)Recruitment agencies which supply individuals to worktemporarily for and under the supervision and direction of clientsOrganisations which pay for or receive or forward payment forthe services of those individualsIndividuals supplied per supply model aboveIntermediaries (and their workers/employees), such as umbrellacompanies, master vendors and neutral vendors 10. Who falls outside of the scope of theRegulations? (examples)Individuals who find direct employment with the clientAgencies when they provide direct employment services(permanent and/or fixed term)In-house temporary staffing banksSecondment arrangements 11. Who falls outside of the scope of theRegulations? (examples)Genuinely self-employed where the status of the hirer/client orthe agency is that of a client or customer of a profession orbusiness undertaking carried on by the individual, eg solicitors,locum doctors, company contractors (nb not automatic)Service providers engaged on managed service contracts areexcluded as are the individuals working on those managedservice contracts (eg IT, catering services)Dispute as to who is within or outside scope? UltimatelyEmployment Tribunals will decide 12. What new rights will agency workers have?IMPORTANT:The new rights under the Regulations are in addition to existingrights, eg equality laws, data protection, National MinimumWage, Working Time Regulations 13. What new rights will agency workers have?Rights After 12 weeksDay 1 (can be restarted/paused/continued)Collective FacilitiesAccess to Vacancies Equal Treatmentand Amenities 14. Day 1 rightsDay 1 rights to be provided by the client (not subject to the 12week qualifying period i.e. from the first day of any assignmentwhich begins on or after 1 October 2011)Agency worker has the right to be told of any relevant vacancieswith the client during their assignment in order to be given thesame opportunity as a comparable employee or worker to findpermanent employment with the clientEntitlement to notice of clients permanent vacancies agency workers should know where and how to access vacancies, e.g. notice board, intranet, induction packs no requirement to advertise staff re-deployment roles in redundancy or restructuring situation BIS Guidance: clients are not constrained regarding requirements for qualifications or experience 15. Day 1 rightsAccess to clients collective facilities and amenities (unlessless favourable treatment is justified on objective grounds) canteen or other similar facilities childcare facilities transport services for example, local pick-up service, transport between sites workplace crche toilet/shower facilities staff common room waiting room 16. Day 1 rightsAccess to clients collective facilities and amenities (continued) mother and baby room prayer room food and drinks machines car parkingNB list above is non-exhaustive, no enhanced rights, excludesbenefits to reward long-term service or loyaltyTreatment must be no less favourable than comparableemployee or worker directly employed or engaged by client 17. Day 1 rightsAccess to clients collective facilities and amenities (continued) Less favourable treatment may be objectively justified Unlikely that cost alone will be enough Practical and organisational considerations Consider offering access to facilities and amenities on a pro rata basis as an alternative to completely excluding them 18. Rights after 12 week qualifying periodEntitled to equal treatment after a 12 week qualifying periodMust work in the same role with the same client for 12 calendar weeksAny week during which the agency worker works is countedBreak of more than six calendar weeks between assignments in orderfor the 12 week clock to be restarted except in certain circumstancesMultiple clients and multiple agencies 19. Calculating the 12 week qualifying periodQualifying clock is reset to zero: New assignment with a new hirer/client Same hirer/client but a new assignment which issubstantively different Same hirer/client but a break of more than six calendarweeks between assignmentsQualifying clock is paused: Break for any reason of six calendar weeks or less and areturn to same role with same hirer/client Break for the purpose of taking leave to which the agencyworker is entitled, including annual leave Break of up to 28 weeks due to sickness or injury or juryservice Regular and planned shutdown in workplace Industrial action at clients establishment 20. Calculating the 12 week qualifying periodQualifying clock continues to tick: Pregnancy, childbirth or maternity: during pregnancy and up to 26 weeks after childbirth Adoption leave or paternity leaveAnti-avoidance provisions Aimed at preventing obvious avoidance 21. What rights will agency workers have afterthe 12 week qualifying period?An agency worker will be entitled to the same basic workingand employment conditions as he/she would have been entitledto for doing the same job had he/she been directly recruited bythe client as an employee or worker 22. What rights will agency workers have afterthe 12 week qualifying period?Basic working and employment conditions are: pay (see next two slides) duration of working time night work rest periods and breaks annual leaveOverall package being the same is not a defenceAfter 12 week qualifying period, pregnant workers have a right totime off for ante-natal carePregnant women and new mothers have additional new rights 23. What rights will agency workers have afterthe 12 week qualifying period? What will pay include? basic pay paid holiday (above Working Time Regulations entitlement if that is what a comparable direct hire is contractually entitled to) payment of overtime (subject to qualifying conditions being met) shift/unsocial hours allowances risk payments for hazardous duties vouchers or stamps with a monetary value, eg luncheon and childcare vouchers bonus or commission payments directly attributable to the amount or quality of the work performed by the agency worker, eg commission linked to sales targets 24. What rights will agency workers have after12 week qualifying period? What will pay not include? (examples) payment in respect of maternity, paternity or adoption leave financial participation schemes such as share participation and profit sharing occupational sick pay occupational pensions redundancy payment benefits in kind such as health insurance bonuses based on organisational performance and those designed for long-term motivation and retention of staff further examples: see BIS Guidance The additional experience and qualifications of the comparable direct hire can be taken into account and justify why the pay rate of the agency worker is lower 25. Liability and penaltiesProtection from detrimentThe Regulations will be enforced through Employment TribunalsCrucial to have internal complaints procedures in place forworkers to express concerns about equal treatmentThe agency has a potential defence if it has obtained or takenreasonable steps to obtain relevant information from the clientAND has acted reasonably in determining the basic working andemployment conditions AND has treated agency workeraccordinglyThe Employment Tribunal will apportion liability and anyfinancial sanctions between the agency, the client and anyintermediaries 26. Liability and penaltiesAgency worker can bring a claim for breach of the Regulationswithin 3 months of the alleged breachEmployment Tribunal can make a declaration, order payment ofcompensation and make recommendations for actionEmployment Tribunal can award compensation of not less thantwo weeks pay as well as any expenses or other lossesincurredCompensation of up to 5,000 can be awarded for breach ofanti-avoidance provisions 27. Liability and penaltiesNo cap on compensationOther costs reputation management time stress relationships between recruiters and clientsHow evidence is gathered beware emails, telephone calls: always act professionally beware data subject access requests 28. Possible workarounds Do workarounds need to be considered? Assignments of less than 12 weeks concerns about agency worker turnover? beware anti-avoidance measures Margin only assignments direct with end user headcount issues? In-house temporary staffing banks staff must only work for the business that employs them 29. Possible workarounds Swedish derogation agency workers with permanent contract of employment withthe temporary work agency are not entitled to equal pay paid between assignments for an aggregate of at least fourweeks before contract can be terminated not less than50% of highest level of basic pay and at least NationalMinimum Wage other conditions that must be satisfied entitled to all the other rights under the Agency WorkersRegulations 30. Possible workarounds Self-employed contractors use the usual tests of self-employment see Directgov linkin the BIS Guidance Project basis without end user client supervision or direction paid for delivering pre-scoped deliverables substitution rights: not personal service 31. Implications for end usersAdministrative burden recruiters will need to work with their end user clients toassess whether workers supplied are within scope if within scope, compile data about pay and other workingconditions and establish the correct rate of pay and otherworking conditions to which each agency worker is entitled calculating the 12-week qualifying period 32. Implications for end usersHigher cost of agency workers? widely reported concerns that costs will increase, butdepends on the type of agency workers engaged highly paid professional/technical agency workers? lower paid agency workers? cost of providing day 1 rights? 33. Implications for end usersClaims against end users? if an agency worker brings a claim and the recruiter canshow that it took reasonable steps to obtain relevantinformation from the end user and acted reasonably indetermining what the agency workers basic working andemployment conditions should be at the end of the 12-weekqualifying period, the end user will be liable to the extentthere is a breach of the Agency Workers Regulations end user client will be liable for failure to meet its obligationsto put in place day 1 rights 34. Implications for end usersConcerns about providing pay data on comparable direct hires torecruiters?Request confidentiality and non-poach undertakings fromrecruitersWill be asked by recruiters to sign new contracts or agreecontract amendments or will want to amend their own terms 35. Implications for end usersNew contract terms are likely to include: obligations on end user client to provide information on the basic working and employment conditions of comparable direct hires potential fee increases confidentiality and non-poach undertakings from recruiters indemnities ensure appropriate risk apportionment 36. Implications for recruiters and othersuppliersCosts will all be passed on to recruiter? increased pay rates will be deducted from recruitersmargin? unfair burden - negotiate! cost of comparator exercise will be borne by recruiter? end users will ask for indemnities?Recruiters and other suppliers will have to request comparatorinformation: if commercially sensitive: offer confidentiality and non-poachundertakings to end user clients? offer comparator consultancy as a value add? chance for recruiters to build deeper relationships with enduser clients? contract terms will need to be re-written 37. Practical tips for staying aheadEducate and allay the fears of your end user clientsUnderstand each clients business and assess the impact of theRegulations on their business review each clients use of temporary contract workers identify who is and who is not within scope break down those within scope by skill sets and pay grades assess what equal treatment will entail formal pay bands: compare the current pay rates of agency workers with entry level rates at the client no formal pay bands: look at pay rates of existing staff doing the same or similar work for the client assess any cost impact assist clients to consider amending salary bandings and bonus schemes 38. Practical tips for staying aheadIs the likely cost impact significant? If so, agree pricing withrelevant clients and/or consider workaroundsPut new contracts in place or amend contracts where necessarywith appropriate agreement on risk apportionment and anyincreased payments, confidentiality and non-poach provisions 39. Practical tips for staying aheadTrain your staff on the Agency Workers Regulations and put inplace appropriate processes and systemsDevelop an internal process to collect information from clientson the basic working and employment conditions that wouldapply if agency workers were recruited directlyEstablish a procedure for passing this information on to anyagency workers who may request this information 40. Practical tips for staying aheadAssist clients with tracking the use of agency workers in thesame role to establish when the 12-week qualifying period iscompleted and develop an internal process to collect thisinformationSimilarly, collect information from candidates on whether theyhave worked previously in the same role with the same client 41. Practical tips for staying aheadHelp clients make any necessary changes to give agencyworkers access to: their collective facilities and amenities such as canteen, crche, on-site gym, transport facilities relevant permanent vacancies within their business, for example, by extending intranet accessInform agency workers of their new rights and entitlements andensure that they know whom to go to in your organisation withany queries or concernsPut in place a complaints procedure for agency workers 42. Conclusions The Agency Workers Regulations 2010 (as amended) will be law from 1 October 2011 Read the BIS Guidance for clarification of how the Regulations are intended to work Do not panic - beware scaremongering unlikely to apply to all agency workers and little effect in many cases If not already done, impact assessments are the key immediate step 43. Any questions 44. The Agency Workers Regulations Are you ready for 1 October 2011?Seminar for recruiters and other suppliers8 September 2011Bridget Wood, Head of Recruitment sector groupbridget.wood@bllaw.co.uk020 7814 5426 Stephanie Slanickova, Senior solicitorstephanie.slanickova@bllaw.co.uk 020 7814 5422