Our updated Guide to the Agency Workers Regulations for Contractors/Freelancers

Guide to the Agency Workers Regulations (AWR) – how does it affect my business?

(Updated January 2014)

The Agency Workers Regulations came into force on 1st October 2011 (in England, Scotland and Wales; from 1st December 2011 in Northern Ireland), but what does it mean for the way you run your business as a Contractor?

The impact of the AWR on Contractors, (for more details about what/who is a Contractor see Appendix 1, at the bottom of the page), Temp/Recruitment Agencies and Umbrella Companies was widely speculated about before the Regulations were implemented, and is still being debated now, so here we hope to clarify what it’s impact on you will be.

Basic facts about the AWR:

The AWR applies to all ‘agency workers’ and gives them the same basic working and employment conditions they would have received if they had been employed directly by the end client in the same job (when compared to a ‘comparable’ permanent employee of the client. A ‘comparable’ worker is a directly employed member of staff who does similar, although not necessarily the same, type of work and generally at the same location. If there is no comparable worker there is no entitlement to equal treatment).

Although the original EU Directive was intended to give low paid ‘agency workers’ protection, the way the legislation was written brings professional, higher-paid, Contractors into its grasp.

In brief the AWR says that:

  • If you are an ‘Agency Worker’ you have a right, after 12 weeks service with a Client (these 12 weeks do not have to be continuous – see details at Appendix 2), to equal pay and equal working hours, rest breaks and holiday provisions and the right to paid time off for ante-natal appointments, that a ‘comparable’ permanent employee of your client receives. (For full details of what is included see Appendix 3).

This means that if you are only receiving the legal minimum entitlement to holidays, rest breaks etc under your employment with an Umbrella Company (for example) you have the right to any enhanced entitlements your Client gives to its permanent staff (if you are in-scope of the AWR).

Here we focus on issues that are important to Professional Contractors relating to pay. Information about the ‘Day 1 Equal Treatment’ provisions that are in the Regulations are included in Appendix 4 as they are generally less important for a professional Contractor.

The Department of Business, Innovation and Skills (BIS) issued final guidance on the Regulations in May 2011, and with the few cases that have made it to Employment Tribunal so far, it is mostly clear that Contractors will be treated as follows by the AWR:

In-Scope of the AWR (so entitled to equal treatment for basic pay, rest breaks, hours, night working, holiday, ante-natal appointments and Day 1 provisions) are:

  • All ‘agency workers’ supplied through a Temporary Work Agency (TWA) – which includes Recruitment/Staffing/Temp Agencies – will be in-scope and entitled under AWR to receive equal treatment with comparable permanent employees. These workers must have a contract or agreement with the TWA and will do temporary work for an end ‘hirer’ (the Company they go to work at) and work under the ‘hirers’ direction or supervision.
  • Workers who supply their services though an Umbrella Company (called an ‘intermediary’) and find work through a TWA. Normally these Workers will have an employment contract with the Umbrella company.

Out-of-Scope of the AWR (so not entitled to equal treatment):

  • It was confirmed in December 2013 that agency workers who are working on an ‘indefinite’ and not a temporary basis at the end-hirer are not covered by the Regulations – full details of the case are here.
  • Any agency worker/contractor that is already treated equally or better than a comparable employee in relation to these benefits.
  • Contractors who are in business in their own right (usually operating through their own Limited Company that is outside of IR35 legislation). Limited Company Contractors are also called Personal Service Companies (PSC). If you are a LCC who works under the ‘supervision and direction’ of the hirer then you may be in-scope. More details about this important issue follow below.
  • Genuinely Self-employed sole-traders who are in business on their own and outside of IR35.
  • Contractors that operate through an Umbrella Company that use the Full (permanent) Employment/Swedish Derogation Model are out of scope but for pay ‘equal treatment’ only (see details below), but remain entitled to equal treatment for rest breaks, holidays etc.
  • Workers who work for an in-house temporary staffing ‘bank’ where they are employed by the hirer directly.
  • Workers who find direct, permanent employment with an employer through a Recruitment Agency.
  • Workers who work directly for managed service companies (MSC’s) e.g. cleaners, catering staff. MSC’s provide a service to the customer but the MSC, not the customer, has responsibility for managing and delivering the service and supervising their workers at the customers premises.

So, what options do I have for employment:

Guide to the Agency Workers Regulations

  • Work via an Agency/Umbrella Company that offers full (permanent) employment for Contractors (via the Swedish Derogation Model). This removes your right to equal pay treatment (see details below) but you still have the right to receive equal treatment for hours, rest breaks, holiday entitlements and time off for ante-natal appointments.
  • Work via an Agency/Umbrella Company that offers a contract that ‘matches’ permanent pay and gives full employment rights – but this may affect the expenses you can claim; you still have equal treatment rights for hours etc, but not equal pay rights.
  • Work via an Agency/Umbrella who offer no AWR ‘solutions’ and so you are fully in scope of the AWR (unless you already receive equal or enhanced benefits).
  • Work via your own Limited Company so you should be out of scope.
  • Work as a self-employed Sole Trader so you should be out of scope.

Guide to the Agency Workers Regulations – Umbrella Companies – what have they done about the AWR?

Contractors working via Umbrella Companies will be classified as ‘agency workers’ under the AWR and therefore be entitled to equal treatment rights at their Clients.

There are many Umbrella Companies in the UK of all varying shapes, sizes and abilities. The large, reputable, ones know where they stand on the AWR and mostly deal with it by going down the Swedish Derogation route (SDM) offering permanent employment to their Contractors, which was and still is proving controversial.

(In September 2013 the TUC lodged a formal complaint with the European Commission, against the UK Government, for failing to enforce EU rules, saying that agency workers are being paid up to £135 per week less to do the same job as permanent workers, because of the SDM. The TUC say 1 in 6 agency workers are employed under the SDM. We wait the outcome, although the Association of Recruitment Consultancies (ARC) have responded to this “cynical” complaint, saying that the “AWR came into being after an agreement was reached between the CBI and the TUC in May 2009… including an agreement on the Swedish Derogation model”).

We believe some smaller TWA’s may still be ignoring the AWR! In September 2012, most Contractors surveyed by an Accountant and Contractor services provider were still unaware of the AWR. ICS polled its clients and found that 47% were unsure about what the Requirements meant; 36% knew a little and 69% had received no information from their agencies.

The Swedish Derogation (Full Employment) Model – what is it?:

When the Agency Workers Directive was negotiated at EU level a Swedish delegation negotiated a clause that said:

  • Where ‘agency workers’ are employed on a permanent contract by their TWA (agency/umbrella) and receive pay in-between assignments, the AWR rights to equal pay for an agency worker no longer exists (so the client does not have to ensure the Contractor receives equal pay to a comparable employee).

For the Swedish Derogation model (SDM) to apply correctly however:

  • The permanent contract of employment with the TWA must be in place before the start of the agency workers first assignment and the employment must be genuine. An Employment Tribunal case at the end of 2012 confirmed that although an agency worker may have been working for the same hirer on a series of the same assignments, when they were asked to sign a new contract on the SDM model this was classed as the ‘first’ assignment so the SDM was in place before the start of this assignment.
  • A TWA using SDM will have a legal obligation to pay agency workers between assignments a minimum amount for no less than 4 calendar weeks. The minimum amount that can be paid is 50% of the workers average basic pay for the last 12 weeks (or at least the National Minimum Wage).
  • The TWA must take reasonable steps to seek suitable further employment for the worker when their assignment ends and make sure it is offered to the worker.

However, this does mean your employment can be terminated by the TWA after 4 weeks, if there is no further work.

And of course the SDM only applies to Pay – it does not remove the equal treatment rights to working hours, holidays etc. So, your Client is still liable for ensuring you receive these (if you are in scope).

Umbrella Companies considered carefully how many hours per week they needed to employ agency workers to be compliant with the Regulations. The Regulations say that a ‘zero hour’ contract is not allowable but the 2011 BIS guidance, although referring to contracts of greater than one hour, does not confirm the minimum amount of hours the contract should be for. It does warn TWA’s against acting outside the spirit of AWR “by structuring contracts that deprive agency workers of the protection provided by pay between assignments”. We are sure however that agency workers on an SDM contract are being offered zero-hours contracts and so far this has not been challenged at Tribunal.

Guide to the Agency Workers Regulations  – What do Businesses (Clients) think? – are they still using as many Contractors?

Before the introduction of the legislation there were mixed views from commentators on the impact on the number of Contractor jobs that would be available.

Surveys polled since October 2011 have shown mixed results:

  • The REC in February 2012 found that the ‘demand for agency staff stays solid’ and that 84% of businesses expect to expand or keep the same level of temporary workers.
  • ExpertHR, in April 2012, said that at the 6 month mark there had been a 22% decrease in the use of agency workers and 36% of respondents were saying that where possible assignments were kept to under 12 weeks. 52% said the increased costs of employing agency workers meant they were less likely to use them.
  • In April 2012 the PCG (Professional Contractors Group) found that the AWR was having a very limited effect on most professional freelancers (77% of participants had not been affected).
  • In August 2012 a survey by the CBI recorded that 57% of the 319 businesses that took part in the survey had reduced their use of agency workers and were using casual contracts, the SDM or asking permanent staff to do more overtime. The CBI said “one year on from the introduction of the regulations, the business verdict is that they are a drag on job creation”……. “The Government must not shy away from a review of all aspects of the regulations that are left to the UK to decide….we should be bold in stripping out needless administration that threatens hiring and does nothing to benefit temporary workers”.

Before the Regulations, Clients (end-hirers) generally believed their costs to hire Contractors would increase, making Contractors who fall in-scope of the AWR more expensive. This is because organisations incur costs:

  • to administer the AWR, because of the following requirements: the need to provide the continued supply of data to TWA’s that will be required by the regulations (pay comparisons, length of contracts, how Contractors are employed and used); and the need to ensure Day 1 rights are given, for which Clients are responsible for. With the introduction of the Regulations the TUPE Regulations were amended to change Employers’ information and consultation obligations – Employers now also need to provide information on the number of agency workers working temporarily for and under the supervision and direction of the employer.
  • if the Contractors they hire are NOT being paid as much as a permanent employee after 12 weeks has passed (if they are in-scope and not covered by a TWA Swedish Derogation Model).

A survey of agencies by the Department of Business, Skills and Innovation (BIS) in 2012 found that temp usage was down during the 1st quarter of 2012 compared to the 1st quarter of 2011. 55% had increased their charge rate (to hirers); 28% were using the SWD; 60% of agency workers had received little or no change in their pay; most employers regularly using agency workers had shortened assignment lengths to less than 12 weeks.

BIS research prior to the implementation of the Regulations showed that agency workers received, on average, 96% of the pay of comparable employees already!

One year after the introduction of the Regulations it was generally felt that the Regulations had increased costs and administration for agencies and hirers and decreased opportunities and provided little benefit to agency workers! There is a general consensus that costs have risen by a minimum of 10%.

Generally though, good Employers have ensured they meet the AWR regulations, where necessary, rather than wait for the temp/Contractor to make a complaint to an Employment Tribunal!

Some Commentators believed that Businesses would try any tactic (short of breaching the ‘anti-avoidance’ measures that are included in the Regulations) to minimise the impact of the AWR on their business, which could reduce the amount of Contractor vacancies. These tactics are being used (alongside complete avoidance by some employers) and include:

  • using only agencies/umbrellas that employ their contractors on a Swedish Derogation model.
  • Hirers refusing to provide pay comparison data to the TWA.
  • limiting use of Contractors to under 12 weeks (or changing Contractors at 12 weeks) – we heard of large numbers of agency workers whose employment was ended as they reached the 1st 12 week period (after the Regulations were introduced) which was on Christmas Eve 2011!
  • Altering the job tasks/description of agency workers so they have no ‘comparable’ employees to compare their terms and conditions against (varying slightly the job they do compared to what the ‘comparable’ worker does).
  • Creating a new position that is slightly different to what normal permanent workers do, employing one permanent person to do this (usually at a lower rate than the normal employees), so that becomes the ‘comparable’ worker that agency workers terms and conditions are bench-marked against (these last 2 practices were highlighted on Channel 4 Dispatches programme on 21st October 2013, ‘the Secrets of your pay packet’).
  • increasing the use of employees on fixed term contracts.
  • increasing overtime amongst existing staff.
  • creating an in-house bank of casual workers on zero-hours contracts or outsourcing to Managed Service Companies (which may explain the rise in zero-hours contracts that have hardly been out of the news in 2013).
  • using fewer agencies and negotiating exclusivity deals with them in exchange for agencies agreeing to absorb some or all of the additional costs. (This has definitely happened as statistics show many smaller recruitment agencies have shut down since the implementation of the Regulations).
  • But more positively, Organisations increasing their use of self-employed Contractors (sole-traders or Limited Companies) as a way of avoiding the AWR. There is evidence that some employers are insisting on individuals setting up their own Limited Company (Personal Service Companies) before they commence work.

So, as a Contractor, what is your best option to reduce the impact of AWR on your business?:

Most professional Freelancers/Contractors will want to assure Clients that they are not in scope of the AWR so the Client does not have increased costs associated with hiring them.

You may feel that you:

  • Are not daunted by the thought of having legal responsibility for your own Limited Company and know there are Contractor Accountants that can simplify the process for you.
  • Are worried that working under an Umbrella could limit your work offers from Clients if they are concerned about the cost of the AWR.
  • Are unhappy about the cultural implications of being a permanent ‘employee’ of an umbrella company and unhappy with the risk of your permanent contract with an umbrella company being terminated after 4 weeks.
  • Do not want to be caught by the ‘24’ month rule that limits you as a Contractor if you work through an Umbrella Company.

Working through your own Limited Company could be the option that will now suit you.

As we mentioned previously there is, however, a small possibility that some LCC’s may be in-scope of the Regulations. So far there has been no test case about this – but we do not believe this will often be the case as the AWR guidance says:

  • Those who are contractors genuinely in business on their own account will be excluded.
  • Those who find work through a TWA but who are in business on their account will be out of scope (if they have a business-to-business relationship with the client).
  • The Government have said that ‘simply putting earnings through a Ltd company would not in itself put individuals beyond the possible scope of the regulations’ – so, there needs to be clear evidence in a contract that the LCC is not under the ‘supervision and direction’ of the hirer. This is a statutory test of the AWR (it does not use the word ‘control’, unlike IR35). Another test of the AWR is that an ‘agency worker’ in-scope is an individual who has a contract to perform work and services ‘personally’ for the agency – therefore this indicates the right of ‘substitution’ should exist for an LCC contract to be out of scope of the AWR.

Also, clearly a lot of LCC’s will be out of scope of the AWR as they will be paid more than their comparators at the Clients already.

The PCG (Professional Contractors Group Ltd), in October 2011, issued a ‘comfort’ letter for Contractors to give to their Agency to help to affirm their status as “out of scope” because they are in business on their own account, thus ensuring agencies and end clients continue to use their services. These letters are available to PCG members. Many agencies are also providing forms which allow freelancers to confirm that they are in business on their own account and thus out of scope. This is because agencies have a legal obligation to establish whether an individual is covered by the AWR or not and often because the end-hirer is demanding this declaration for each worker, otherwise they will not employ them. Some employers are also requiring that the agency provides an indemnity against claims that might be brought by the worker against the end hirer.

If a Contractor believes they are in scope of the AWR (and wishes to be), then they would need to dispute their employment ‘status’ at an Employment Tribunal. The Employment Tribunal will consider if the description of the arrangement in the contract reflects the reality of the relationship and weigh up on balance whether they are in business on their own account or not (and have a business to business relationship with the end client).

In assessing the (self-) employed status of an individual an employment tribunal is likely to examine the following:

  • The express terms agreed between the parties in both the upper and lower contracts (the contracts between you and the agency and the agency and the client)
  • The degree of autonomy that the contractor has in determining how the work is undertaken
  • The degree of supervision, if any, that the end user client exercises over the contractor
  • Whether the contractor (or his Accountant) prepares and submits his own accounts to HMRC
  • Whether the contractor is entitled to be paid during periods where no work is being carried out
  • The level and degree of financial risk which the contractor is exposed to under the contract(s) and the extent to which the contractor is able to increase his own profit
  • Whether there is a contractual requirement for the contractor to provide services personally (although the fact that this requirement exists will not in itself rule out that the hirer or agency are clients or customers of the contractor’s company)
  • Whether the contractor supplies tools, equipment, materials for the purpose of the assignment
  • Whether the individual is obliged to work exclusively for one client or whether they can in fact work for more than one client at a time
  • Whether the individual has fixed hours of work or whether they can choose when they work.

If the contractual arrangements do not reflect the reality of the relationship (e.g. despite the wording of a contract, the actual reality is that the individual is in not in business on their own account, and they work under the supervision and direction of the hirer), then individuals are likely to fall into scope of the Regulations.


Much of the AWR guidance is in line with IR35 legislation although the Government have made no official link between the 2 pieces of law and there is still no clear idea yet whether all IR35 tests will be applied to the AWR. It is likely, although still not confirmed, that AWR will apply to LCC’s if their working practices fall inside IR35.

Forming a Limited Company could be your best option for avoiding AWR (legally!).

And finally:

It can be generally assumed, aside from the possibly contradictory commentary, that for many professional contractors the AWR has had little effect and it is business as usual, or a chance to lower their tax liabilities (and benefit from other advantages) by incorporating into a Limited Company.

Essentially, as with all new legislation, there was a lot of speculation about how it would work in practice. Surprisingly there has been few employment tribunal claims in this area – which could be because agency workers cannot afford to be litigious or all hirers and agencies are complying with the law (which we know not to be true) – because there has been so little case law we are still waiting to see what the law decides in time! There are several areas of the AWR that are still unclear, besides what we have already mentioned, and these include:

  • How bonus pay is defined and when it is included in the equal pay provisions. The Regulations say that bonuses linked to individual performance are included, but bonuses linked to corporate performance or length of service are excluded. However, what if a bonus is a hybrid of these which most often are, how do you define if this is included or not? This may be important to a Contractor who is in scope of the AWR and whose rate is more than a comparable employee but they do not receive bonuses as comparable staff do.
  • Calculating ‘comparable’ pay rates. If there is a choice of ‘comparable’ worker which one do they choose? One who has completed just 12 weeks service at the same time as the agency worker? What if the agency temp has been doing the job for 2 years? Should they then compare them with someone of similar service? Is it acceptable to place the worker at the bottom of the pay scale? The BIS guidance says that if skills and qualifications influence the rate of pay for direct employees, the same must apply for the agency worker. The Guidance does not address whether length of service or quality of performance should be taken into account! An Employment Tribunal case in early 2013 did confirm that quality of performance issues should be taken into account. The CBI have called on the Government to streamline the complex definition of pay to allow for easier comparison.

Other developments, Guide to the Agency Workers Regulations :

    • It was confirmed in early 2013 by Employment Appeal Tribunal that agency workers have the right not to be discriminated against by the organisation they are supplied to work at (under The Equality Act 2010).
    • In April 2013 the Parental Leave Regulations were amended to extend the right to request flexible working to agency workers who are returning to unpaid parental leave (they were not eligible before).
    • In 2013 the Government consulted upon provisions in the forthcoming Children and Families bill – this bill currently includes provisions for agency workers (and employees of course) to take unpaid time off work to attend up to 2 antenatal appointment with a pregnant employee. Whether this will be implemented and at what date we don’t yet know.
    • With the introduction of Pension Auto-Enrolment in October 2012, where all firms by 2017 will need to pay into a pension scheme for their employees – agency workers will also be included in this and the responsibility for dealing with the enrolment generally falls on whoever is responsible for paying them.
    • The Government consulted earlier this year on slimming down the paperwork requirements of the AWR, but so far have not published any response to this consultation, so we wait to see what happens here.
    • An Italian case that went to the European Court of Justice (ECJ) in June 2013 ruled that agency workers do not have rights under the EU Fixed-Term Work Directive (which in the UK is the Fixed-Term Employees, Prevention of Less Favourable Treatment Regulations 2002). Agency Workers are not specifically excluded from these Regulations and while in Europe it is accepted that agency workers are not entitled to the same rights as an employee, the same principle is not made clear in UK law. There are calls for the AWR to be tightened up on this aspect.

It was confirmed in December 2013 that agency workers who are working on an ‘indefinite’ and not a temporary basis at the end-hirer are not covered by the Regulations – full details of the case are here. October 2013

Appendix 1: What is a Contractor? Guide to the Agency Workers Regulations

There are basically 3 different ways you can be employed in a job in the UK:

  • As an Employee of a Company (with a permanent or fixed-term contract) where you receive a salary and benefits and your Employer deducts PAYE Tax and National Insurance Contributions from your pay. You are supervised and obliged to do the work that you are contracted to do. Employees have employment rights.
  • As a Worker where you work on a temporary basis, usually as an Agency Temp or a Casual Worker (short-term contracts) but you also have PAYE Tax and NI contributions deducted from your pay by the Employer. Workers have some employment rights.
  • As a Self-Employed person – you can be called a Freelancer, Sole Trader, Contractor, Limited Company. The self-employed have very few employment rights at present.

A Contractor provides services to a specific client under specific terms. A Contractor, however, can either be classed as:

  • a Worker or an Employee (if they work for a Client through an Umbrella Company or Agency – then the Umbrella Company/Agency is their Employer; not the Client) or as
  • Self-Employed (if they are a Sole Trader or have a Limited Company of their own).

A Contractor is different to a Temp (even though they may both work for an end client through an Agency) because:

  • A Temp will be paid by the Agency. The work they do is under the Client’s control like any permanent employee (you are supervised and are told what times to start and finish work, what to do). Temps are eligible for holiday and sick pay. From October 2011 they will be, in most circumstances, eligible for ‘equal treatment’ under the new Agency Worker Regulations. Temping is often done in the short-term and/or for a transitional period while they look for another permanent job.
  • A Contractor, however, is responsible for their own ‘business’ dealings and has control of how and when they do their work. They would either be employed through an Umbrella Company for the purpose of paying them (and paying their taxes) or have their own Limited Company or be a Sole-Trader and pay their own taxes. They may or may not work through an Agency. They can have a series of assignments from several clients at the same time. They may hire a ‘substitute’ to do the work for them. Contractors are generally higher-paid ‘professionals’ who are contracting in the long-term.

When a Contractor works for a Client, in comparison to an Employee working at the same Company, Contractors will generally:

  • have significantly more freedom regarding the work that they do or do not take on – they are not obliged to accept a contract. This is called ‘Mutuality of Obligation’. In an employment contract (a ‘contract of service’), the employer is obliged to provide work and the employee is obliged to do that work. A Contractor has a ‘contract for services’ in which there is no such obligation – the contractor agrees to provide services to the client in accordance with an agreed schedule. The contractor assumes liability for any errors or omissions. Once the project outlined in the contract has been completed, the client does not have to offer the contractor any more work. If the client does choose to offer more work, the contractor does not have to accept it.
  • have freedom and control over when and where they do the work, however the nature of the job usually involves working on a clients site at some point. Although the client will probably have a clear idea of the ‘deliverables’ that they require, a Contractors working patterns cannot be defined by the client.
  • while Employees are paid for the hours they work (generally paid monthly), Contractors are paid on completion of specific ‘milestones’, which should be defined in the contract.
  • have some tax advantages but there are disadvantages – mainly the lack of employment rights and benefits – while Employees of the Client are generally entitled to redundancy pay, holiday and paid sick days etc, Contractors are not.
  • have no redress if the Client terminates or chooses not to renew the contract. The contract should clearly set out the way in which termination will be handled and either party can terminate the agreement immediately if a breach of contract has occurred.
  • A Contractor working through an Agency will have obligations under the Conduct of Employment Agencies and Employment Businesses Regulations.

Guide to the Agency Workers Regulations  – Legal structures for contractors:

Deciding on a suitable legal structure for working as a self-employed person should be one of your first tasks when starting out as a Contractor.

Up until the 1980’s the most common way of operating as a Contractor was as a Sole-Trader. However, in the late 1980’s HMRC bought in a rule that made Recruitment Agencies liable for unpaid tax if they engaged self-employed workers and paid them gross. This stopped Recruitment Agencies using the Sole-Trader so Contractors were forced to set themselves up as their own Limited Company (as the Agency does not have liability to unpaid taxes when dealing with a Limited Company). Following the introduction of IR35 in 2000, there are now a range of company structures that can be used. The decision on which structure to use will depend on varying factors, including whether or not your contracts are likely to fall within the IR35 rules. It is therefore vital that you understand what IR35 means.

Appendix 2: Calculating the 12 weeks service

The 12 weeks service needed for equal treatment rights for pay, hours, holiday etc are calculated as follows:

  • You must work for the same Client (‘hirer’) in the same job for a total of 12 calendar weeks.
  • It does not matter how many hours you work each week, it can be part-time.
  • It also does not matter if you have worked for the Client (‘hirer’) through more than 1 agency during these 12 weeks.

The continuity of these 12 weeks will not be broken if you stop working for the Client (but return later to the same job) because:

  • You have a break of up to 6 calendar weeks – when you return to the Client to do the same job you start re-counting towards the 12 weeks after your return.
  • You are sick or injured and incapable of work or are doing jury service – up to a maximum period of 28 weeks.
  • You take a break due to pregnancy or maternity – this time off is ‘protected’ from the start of the pregnancy up until 26 weeks after childbirth (or when you return to work), for as long as the assignment was originally intended to last.
  • You take a break on statutory maternity/paternity/adoption leave – where you are entitled to this – protected for up to 26 weeks after childbirth (or when you return to work) for as long as the assignment was originally intended to last.
  • You take accrued annual leave entitlement.
  • If the ‘hirers’ workplace is shut (e.g. for Christmas or because of industrial action).

N.B. A pregnant agency worker does not have any further rights under the AWR beyond those they are already entitled to and they do not have an automatic right to return to work after maternity leave.

This continuity of the 12 weeks will be broken, however, if an agency worker:

  • starts a new assignment with a different client.
  • has a 6-week or longer break from the same (original) client (you can, for example, work in the same assignment for 10 weeks then not work for the same client for another 4 weeks, but then return to the same client in the same job and would be entitled to equal treatment 2 weeks into the second assignment).
  • starts a new role with the same (original) client that is substantially different from the previous role (e.g. different skills are needed, hours are different, pay is different, different location, different line manager).

Appendix 3: What is covered under ‘Equal Treatment’?

‘Equal Treatment’ will mean that ‘Agency Workers’ will have, under the AWR, from 1st October 2011:

The right to the same basic employment and working conditions as permanent staff they are ‘comparable’ with (at the ‘hirers’ company) as long as they have worked for the client for a period of 12 calendar weeks in the same job.

The terms and conditions included for equal treatment are:

  • Pay – Agency Workers who are eligible must receive the same ‘pay’ as comparable workers. Pay includes basic pay, holiday pay, overtime pay, bonuses linked to individual performance, vouchers that have a monetary value e.g. lunch or child-care vouchers, annual pay awards. In relation to those Workers who work through a TWA via an Umbrella company, their pay must also be comparable but it does not mean they should be paid more i.e. where an umbrella workers receives part of their pay as reimbursement for travel expenses this can be included in the comparable rate (e.g. if a directly recruited worker receives £100 per day, an umbrella worker could receive £80 plus £20 reimbursement).
  • Rest Breaks, Night Work, Working Hours and Annual Leave – where companies provide contractual arrangements for rest breaks, hours of work and annual leave that are more generous that the statutory minimum, then an ‘Agency Worker’ who is eligible must receive these enhanced benefits.
  • Paid time off for Ante-natal appointments for pregnant ‘Agency Workers’ that are eligible (and the hirer is asked by the TWA to perform a health and safety risk assessment. If the worker can no longer safely complete the duties of the assignment they will need to be found alternative work, at the same rate (or higher) than the original assignment. If this is not possible then the pregnant ‘agency worker’ will have the right to be paid by the agency for the remaining expected duration of the original assignment).

The terms and conditions that this right to equal treatment DO NOT apply to are:

• Bonuses (that relate to the hirer’s corporate performance or are given to award long service)
• Loans
• Expenses
• Company Pension Schemes (Agency Workers will be covered by new automatic pension enrolment schemes that will be phased in by the Government from October 2012)
• Health or Life Insurance/Assurance schemes
• Share Option Schemes
• Family-Leave related pay that is above the statutory minimum
• Occupational Sick Pay schemes (Agency Workers already have a right to receive Statutory Sick Pay)
• Payment for time-off for Trade Union activities
• Occupational Maternity/Paternity/Adoption pay
• Redundancy Pay
• Notice Pay (either statutory or contractual that is linked to the loss of employment).

The Regulations also do not require Agency Workers to be integrated into the hirer’s performance appraisal systems.

Appendix 4: The Day-One Equal Treatment Provisions:

The other Equal Treatment provisions that come into force from 1st October 2011 are called ‘Day-One’ provisions which mean, of course, they are available from Day One of the assignment (you do not need 12 weeks service). These are:

  • Agency Workers will have the right to be told of any relevant vacancies at the client’s organisation during their assignment (in whatever is the normal way that direct employees are informed of internal vacancies) and have the right to apply for such vacancies. The only exception is where internal vacancies are ‘ring-fenced’ for existing staff due to redeployment/restructuring/redundancy situations.
  • Agency Workers have the right to be treated no less favourably than a comparable worker in relation to collective facilities and amenities at the hirer’s workplace, which could include canteens, toilets/shower facilities and childcare facilities and parking facilities (if there is a waiting list for any such facilities the Agency Worker would join the waiting list along with the hirers direct employees).
  • Agency Workers will also have the right not to suffer a detriment for asserting their rights under the Regulations.
  • Agency Workers will have some limited unfair dismissal rights relating to a dismissal that they can show was related to reasons connected to the AWR as long as they had been employed in a contractual relationship with the supplier (TWA) for at least 12 months.

Guide to the Agency Workers Regulations