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The Demise of the Agency Worker

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It is estimated that on any given working day there are approximately 1.2 million agency workers on assignment in the UK.

Agency workers give organisations flexibility and the capacity to respond quickly to seasonal or market changes, which can be particularly useful in unstable economic times when businesses are wary of recruiting permanent staff, but want a pool of skilled individuals ready for the economic upturn.

The Agency Workers Regulations 2010, which come in to force on 1 October 2011, threaten to change that. The Regulations were prepared after a long and complex consultation period and were designed to protect agency workers, who the government felt were vulnerable and often exploited. However, the burden the Regulations are likely to place on businesses may, in fact, lead to a decrease in agency work as we know it.

The Regulations give agency workers equal access to collective facilities and an entitlement to be informed of any permanent vacancies in the hirer’s business. These rights apply from the agency worker’s first day in the organisation.

Providing that the agency worker has completed 12 weeks continuous service, he or she will be entitled to the same basic working and employment rights as permanently staff. Service will only be broken if the agency worker takes on a substantially different role with the hirer or there is a break of more than six weeks.

The Regulations will entitle agency workers to the same pay (including performance-related bonus), rest breaks, holidays and duration of working time as comparable permanent staff.

This is likely to have financial consequences for business and will also require new systems to be put in place (such as appraisal systems for agency workers to ensure that they are treated the same in terms of performance bonuses).

The agency will bear the brunt of the liability for any breach of the Regulations, but the hirer can also be liable. Agencies will have greater administrative costs once the Regulations come into force and are likely to pass these costs on to hirers by way of higher charges for their workers.

There is also the possibility that agencies will seek to change the commercial agreements they have with clients to ensure that the liabilities under the Regulations are shared.

It is not possible to circumvent the Regulations by structuring assignments which avoid the 12 week service. In fact any employer doing so is liable to face a fine of £5,000.

As a result it is important to consider what steps should be taken in readiness for the changes and identify other possible solutions to temporary increases in demand. Put simply, agency workers will no longer be a quick and simple temporary ‘fix’.

The irony of the situation is that in trying to protect agency workers, the Government may, in fact, have contributed to their decline!

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