Agency Worker Regulations Explained

The Agency Workers Regulations were implemented on 1st October 2011. Their core purpose is to align the basic employment conditions – including elements such as pay and holiday entitlement – for temporary workers with those of the people they work alongside.

The final impact of the new rules, on both employers and agency workers, will not be totally clear until the Government issues its Guidance Notes in the next few months. However, what is clear is that the introduction of the new Regulations will not alter the convenience and flexibility of using temps.

In the meantime, we are pleased to provide the following information to help you understand and prepare for the new Regulations.

Definition of an ‘Agency Worker’

The new Regulations will cover ‘regular’ agency workers and workers supplied through ‘intermediaries’ including workers employed by umbrella companies. They will not cover genuinely self-employed, limited company contractors, or managed service contractors.

Qualifying period

Once an agency worker has completed 12 calendar weeks where they are doing the same job with the same customer, they will qualify under the new Regulations. It does not matter how many days (or hours) they work each week.

If the agency worker takes a ‘short break’ (anything less than 6 weeks) in the same job, the qualifying period will not be broken.

On the other hand, the ‘clock’ will restart if the agency worker starts a new role with the same hirer that is genuinely ‘substantively different’ to the previous one and the agency has put in writing the type of work to be done in the new role.

Equal treatment

So, after the 12-week qualifying period has been completed, the agency worker becomes entitled to the same ‘basic working and employment conditions’ as if he had been recruited directly by the hirer to do the same job as an employee or worker.
Treatment consistent with that of a comparable employee or worker will be deemed to constitute compliance with the Regulations.

Definition of pay

Under the terms of the Regulations, this means basic pay plus other contractual entitlements directly linked to the work undertaken by the agency worker whilst on assignment.

This means that the following items, for example, will be included: overtime, shift allowances, unsocial hours premiums and any benefits in kind which have a monetary face value and which are exchangeable for money/goods/services, such as luncheon vouchers.

The following items are examples of those that will be excluded: some bonuses (see below), company sick pay, pensions, profit-sharing, share ownership schemes and maternity, paternity or adoption pay.

Bonuses which are excluded are those which are not directly attributable to the amount or quality of work done but are paid for reasons such as encouraging worker’s loyalty or reward worker’s long-term service.

Working time and holiday entitlement

Agency workers may expect parity on working time and holidays, but calculating this entitlement will be difficult where agency workers are working on short assignments for a number of different hirers.

Access to employment, collective facilities and vocational training

Agency workers may equal treatment in these areas from ‘Day One’ rights, that is to say, the 12-week qualifying period does not apply. For example, if a job vacancy becomes available at the hirer’s organisation, it would need to be publicised in such a way that the agency worker could find out about the opportunity and submit an application as easily as their regular permanent colleagues.

There is no exhaustive list for ‘collective facilities’ but these include provisions such as an on-site crèche, canteen or gym.


New anti-avoidance provisions are being introduced to ensure that the Regulations are not abused, for example by means of the agency worker being moved between different companies in same group. Tribunals can award up to £5,000 additional compensation for breaches of the provision.

Finally, let’s correct some of the myths about AWR

Myth: The AWR will mean that temps cannot be taken off jobs easily because they will have the same rights to claim unfair dismissal as permanent employees

Fact: The AWR does not grant extra employment rights. It only applies to basic pay, holidays and working conditions

Myth: If I want to remove a temporary worker from an assignment I will have to pay them redundancy

Fact: The AWR gives no right to receive redundancy pay

Myth: If my temps are paid more than my full time workers I will have to pay them less or increase my pay rates to my full time staff

Fact: The AWR does not ‘cut both ways’ it only demands the temp is paid at least what a permanent staff member is