Under new EU Regulations on agency workers coming into force this October, agency staff who have worked for 12 consecutive weeks at a company will be entitled to the same pay, overtime and breaks as permanent staff doing the same job.
They must also have equal access to intranets, internal job postings, canteens, transport and other benefits.
One avoidance tactic would be to terminate all agency worker contracts at 11 weeks and ensure there is a break of more than six weeks before the same workers are hired again, thereby ensuring they do not qualify for equal treatment as per the legislation.
However, this is a risky strategy, warns Eversheds in a new briefing document for employers.
“While this option works in theory, it may not be manageable in practice and risks breaching the anti-avoidance provisions which are aimed at penalising hirers where they intentionally structure assignments to avoid the regulations. For example, should an agency worker return a third time to the same role, having been terminated at 11 weeks on two previous occasions with seven week intervening gaps.”
Agency workers cannot ‘contract out’ of the Regulations
Meanwhile, it is not possible to contract out of the legislation, stresses Eversheds. “This is expressly prohibited. Furthermore the regulations provide for a fine of up to £5,000 for avoidance arrangements which are designed to prevent the 12 week qualifying period being met. For example, were a hirer to intentionally rotate agency workers through substantively different assignments to break continuity.
“However, these anti-avoidance provisions will only bite when the worker has completed two or more assignments or roles with the hirer or with connected hirers (they are connected where, for example, the first hirer has control of the second) and potentially require tribunals to investigate hirers’ motives where assignments raise suspicion.”
Eversheds explains that effective record-keeping is essential for firms wishing to stay on the right side of the law, which also stipulates that the qualifying 12 week period does not have to be with the same agency.
“An agency worker working with different agencies who each place him with the same hirer in the same role for just one day per week in a 12 week period will qualify for equal treatment under the law," said the law firm.
“In practice, this introduces a requirement upon agencies and hirers to keep much better records of agency worker placements and to share that information between each other, which is likely to prove administratively difficult and costly.”
A threat to flexibility?
While trade unions argue the legislation is long overdue, some employers’ organisations fear it could increase wage bills and reduce flexibility, while others are most worried about the extra paperwork.
Click here to access Eversheds' briefing document.