APPENDIX 1
Temporary agency work in the UK: the legal framework
Temporary agency work in the UK is facilitated
in a unique set of circumstances. The UK model provides a successful
solution for workers who want more flexible work options and employers
who need temporary resourcing. The REC has a great deal of information
about why temporary workers in the UK chose to work through agencies,
why clients use temporary workers and on the profile of temporary
workers. This briefing however looks at the legal framework for
temporary agency work in the UK.
Temporary work agencies in the UK are governed
by a specific set of regulations attached to the 1973 Employment
Agencies Act. These were updated in 2003 and closely regulate
the three-way relationship between the agency, worker and end
user.
A temporary agency worker in the UK is not usually
an employee of the employment agency. Rather they are engaged
under a contract for services. This reflects the fact that there
is no mutuality of obligation between the agency and the temporary
worker. The worker may chose to leave the assignment at any time
without notice or liability and the agency may terminate the assignment
at any time in a likewise fashion. Another feature which illustrates
that a temporary agency worker is different from an employee is
that a temporary agency worker may work through several employment
agencies at any one time. Their relationship to the agency is
not an exclusive one.
It is worth noting that whilst temporary agency
workers are not engaged as an employee, their primary relationship
is always with the temporary work agency. The worker's contractual
relationship, their terms and conditions are with the agency.
These terms and conditions are governed by the provisions under
the Employment Agencies Act and those attributed to the worker
by virtue of them being a worker. In both cases these rights are
governed by labour law and breeches can be addressed through the
employment tribunal system. These relations are not governed by
commercial law.
The regulations under the Employment Agencies
Act (EAA)[110]
govern aspects of the worker's relationship which are exclusive
to the triangular relationship. Some examples include:
— the information an agency should
give a worker about the assignment,
— the fact that the agency cannot charge
a worker for work seeking services,
— the fact that an agency should warn
a worker of any health and safety concerns in the workplace of
the end user,
— the fact that the agency should only
place a worker who is qualified to complete the assignment,
— the obligation for an agency to pay
a worker for the work completed, even if the agency has not been
paid by the end user.
The temporary agency worker also has a great
many rights through being defined as a worker. This is explained
in more detail below.
Definition of employee and worker in English law[111]
In order to explain the relative positions of
an employee under a contract of employment and a worker under
a contract for services in English law, it is helpful to look
first at the statutory definitions of both employee and worker
in section 230 of the Employment Rights Act 1996:
"230.—
(1) In this Act "employee" means
an individual who has entered into or works under (or, where the
employment has ceased, worked under) a contract of employment.
(2) In this Act "contract of employment"
means a contract of service or apprenticeship, whether express
or implied, and (if it is express) whether oral or in writing.
(3) In this Act "worker"
(except in the phrases "shop worker" and "betting
worker") means an individual who has entered into or works
under (or, where the employment has ceased, worked under)—
(a) a
contract of employment, or
(4) In this Act "employer",
in relation to an employee or a worker, means the person by whom
the employee or worker is (or, where the employment has ceased,
was) employed.
(5) In this Act "employment"—
(a) in
relation to an employee, means (except for the purposes of section
171) employment under a contract of employment, and
(b) in
relation to a worker, means employment under his contract; and
"employed" shall be construed accordingly."
Workers engaged by employment businesses in
the UK fall into the definition in Section 230(3)(b) above and
as such derive their working rights from this.
Employee and worker rights under English law
The vast majority of employment rights are also
assigned to workers in the UK. A list below outlines the key rights
attached to workers engaged by agencies.
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| Temporary workers' rights | Further information
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| Pay | National Minimum Wage Act 1998:
Temporary workers have to be paid for all time worked at least at the national minimum wage.
The Conduct of Employment Agencies and Employment Business Regulations 2003 (the Conduct Regulations):
Temporary workers must be paid at the agreed rate for all time worked irrespective of whether the client company has paid the agency for the service.
Employment Rights Act 1996:
No unlawful deductions may be made from a temporary worker's pay.
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| Pay slip | Temporary workers should always receive a pay slip detailing their pay, tax and national insurance contributions.
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Working time rules including
overtime, work breaks, rest
periods and night work
| Working Time Regulations 1998 and amemdments:
Working time rules apply to temporary workers as to any other worker/employee in the UK labour market including sector specific working time rules, for example in the road transport sector.
Temporary workers are usually paid by the hour.
These hours are recorded on a time sheet.
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| Holiday entitlements | Minimum of 20 days a year (as part of the working time regulations). This will be extended to paid public holidays (a further 8 days a year being rolled out over 2007-2008).
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| Protection against discrimination on grounds of sex, race or ethnic origin, disabilities, religion, beliefs, age or sexual orientation
| All of the below explicitly apply to temporary workers, agencies and employers:
Sex Discrimination Act 1975
Race Relations Act 1976
Disability Discrimination Act 1995
Employment Equality (Religion or Belief) Regulations 2003
Employment Equality (Sexual Orientation) Regulations 2003
Employment Equality (Age) Regulations 2006
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| Health and Safety coverage | In English law an employer has a common law duty of care for all people on their site, whether they are employed by them or not.
All European Health and Safety Directives apply equally to temporary workers in the UK.
Employment Agencies have a duty, under the Management of Health and Safety at Work Regulations 1992, the Gangmasters Licensing Standards 2006, the Gangmasters (Licensing Conditions) Rules 2006 and the Conduct Regulations, to inform a temporary worker of the health and safety risks at their work place, the steps a hiring employer is taking to control or minimise those risks and to agree between them the management of the ongoing health and safety of a worker's working environment during the course of an assignment.
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| Sick pay | Temporary workers are entitled to Statutory Sick Pay subject to the normal qualifications applicable to employees.
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Maternity, paternity and
adoption pay |
Temporary workers are entitled to Statutory maternity, paternity and adoption leave pay subject to the qualifications as applicable to employees.
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Trade union membership and
recognition rights
| The laws governing trade union relations apply equally to temporary workers.
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| Training | This is dealt with by the Sector Skills Councils in the UK. For example in Construction employment agencies often pay the skills levy to the Construction Skills Council.
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| Temporary to permanent fees | These are governed by Conduct Regulation 10 which prescribe the limits within which such fees are enforceable.
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NB: Temporary workers have full access to health services
in the UK. The UK's comprehensive National Health Service is free
at the point of use for residents who have permanent right to
remain in the UK and EU citizens who reside in the UK. Access
is not related to levels of contributions to tax revenues or the
National Insurance scheme.
Rights which temporary workers do not have in the UK and
the Government's assessment of these rights in relation to temps[112]:
— Protection from unfair dismissal: workers receive
this after 12 months in the UK. It was not considered necessary
to extend this to temporary agency workers as contracts are usually
shorter than 12 months.
— The right to redundancy pay: workers receive this
after 2 years, again it was not considered necessary to extend
this to temporary agency workers as contracts are usually shorter
than 12 months.
— The right to maternity leave: temporary workers
receive statutory maternity pay. After returning from leave the
worker has every right to be registered for work with their former
agency or many other agencies.
Enforcement of worker rights in English law
In the event that a temporary worker has a claim against
either an employment business or a client hirer arising out of
an assignment or series of assignments, such claims are brought
in the Employment Tribunal in the same way as an employee would
bring any claim arising out of his/her employment to an Employment
Tribunal.
Conclusion
Whilst temporary agency workers are usually engaged under
a contract for services their rights as workers mean that they
are rarely treated differently to an employee with respect to
statutory rights. Essentially the definition of worker under the
Employment Rights Act 1996 gives temporary agency workers, and
many other workers on differing contract types, a "floor
of rights".
110
1973 and the associated Conduct Regulations from 2003 available
at: http://www.dti.gov.uk/employment/employment-agencies/index.html
and http://www.opsi.gov.uk/si/si2003/20033319.htm Back
111
Please note that this briefing is set in the context of English
law. English law applies fully in Wales. In Scotland and Northern
Ireland similar provisions apply however slightly different case
law may apply. Back
112
Success at work, March 2006, pages 16-17. Back
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