Calculating the 12-week qualifying period under the Agency Workers Regulations 2010 – a guide

This article first appeared on XpertHR

The Agency Workers Regulations 2010 (SI 2010/93) came into force on 1 October 2011. They grant agency workers specific rights in relation to their basic working and employment conditions and also as regards access to collective facilities and amenities provided by the hirer and to information regarding vacancies within the hirer’s business.

The Regulations apply whenever an individual is supplied by a temporary work agency to work temporarily for and under the supervision of a hirer, where the individual has a contract of employment with the agency, or a contract with the agency to perform work and services personally. They apply regardless of whether or not the worker is provided through an intermediary (such as a master or neutral vendor) or an umbrella company. Although workers who are genuinely in business on their own account will not be covered, the scope of the Regulations is very wide and designed to ensure that parties cannot avoid their effect simply by the way in which the relationships between the hirer, agencies and individual workers are structured.

Rights under the Regulations

There are two kinds of right under the Regulations. The first type of right applies from day one of any assignment and relates to the way in which the worker is treated by the hirer. The agency worker is entitled to be treated no less favourably than a comparable worker employed by the hirer in relation to access to collective facilities and amenities offered by the hirer. In addition, the agency worker is entitled to be informed of any vacancies with the hirer, to give the agency worker the same opportunity as comparable directly employed staff to find permanent employment with the hirer. These rights are the responsibility of the hirer and the hirer alone.

The second type of right relates to the terms and conditions on which the agency worker is engaged and is more complicated. Broadly speaking, the agency worker is entitled to enjoy the same basic working and employment conditions on which he or she would have been employed had he or she been directly employed by the hirer.

However, this “equality right” applies only where the agency worker has completed the 12-week qualifying period. It is the operation of this qualifying period that is the chief focus of this guide.

The 12-week qualifying period

To complete the qualifying period the agency worker must work in the same role with the same hirer for 12 continuous calendar weeks.

An agency worker can complete the qualifying period over the course of a number of assignments with a variety of agencies. What matters is that for the duration of the 12 weeks, the worker is engaged in the same role with the same hirer.

Same role

If a worker is moved to a new role with the hirer, this will break continuity only if the work or duties that make up that role are “substantively different” from the work and duties making up the previous role. It is the work and duties that must be different, rather than the location of the work, or the part of the organisation in which the agency worker works. Simply moving an agency worker from, for example, a general administrative job in one department to the equivalent role in a different department is unlikely on its own to amount to a different role for the purposes of the Regulations.

However, the job need not be completely different to amount to a new role. The difference must be substantive (ie a real difference of substance), but it need not be substantial (ie a completely different job). For example, there may be considerable overlap between the job of an administration assistant and a receptionist. However, as long as the roles involve a real difference in duties, they will be regarded as different, even if the same agency worker could comfortably perform either role with no need to retrain.

The guidance (PDF format, 330K) on the Regulations issued by the Department for Business, Innovation and Skills (BIS) (on the BIS website) lists a number of factors that may be considered in deciding whether or not the work or duties are substantively different, namely whether or not:

  • different skills and competencies are used;
  • the rate of pay is different;
  • the work is in a different location or cost centre;
  • the line manager is different;
  • the working hours are different;
  • the role requires extra training; or
  • the role involves using different equipment.

However, while these factors may to some extent be taken into account, it is important that employers do not lose sight of the simple fact that what matters is whether or not the work or duties are substantively different. Whatever the surrounding circumstances or the organisational arrangements may be, it is always the actual work being done by the agency worker that is crucial.

Not only must the work be substantively different, but, on a change of role, the agency must inform the agency worker in writing of the type of work that he or she will be required to do in the new role. This means that a hirer cannot move an agency worker around an organisation and argue later that this amounted to a number of different roles with no continuity between them. The employer should liaise with the agency, which must inform the worker of the fact that the role is a new one by giving him or her specific written notice of the duties that the new role involves.

Same hirer

To accrue continuity of service for the purposes of the qualifying period, the agency worker must be in the same role with the same hirer. It appears that the hirer for these purposes is the legal entity, such as a company, firm or public authority, that enters into the contract with the agency. For these purposes, associated employers, such as different companies within the same group, are regarded as separate legal entities, so that an agency worker who ends an assignment with one company and begins working at one of its sister companies will not have continuity between the two assignments.

However, where associated employers deliberately engineer a transfer of an agency worker between them to prevent the qualifying period from being completed, this is likely to fall foul of the anti-avoidance provisions (see Anti-avoidance provisions) with the result that the qualifying period will be deemed to be completed and the agency worker will be entitled to punitive damages.

Defining a week

The qualifying period consists of 12 calendar weeks. Any week during the whole or part of which the agency worker works during an assignment is counted as a full calendar week. This means that even a single hour’s assignment is enough to give the worker a week of qualifying service. Therefore, even if the agency worker’s hours vary, continuity will continue to build up, provided that in each week the worker does at least some work in that role with the hirer.

Multiple assignments

An agency worker may be on several assignments at once, either with the same agency or with a number of them, and either with the same hirer or with several hirers. There is nothing to stop an agency worker from accruing qualifying service in relation to a number of different hirers at once. For example, a worker may work in one school on certain days and complete the qualifying period in relation to that assignment, but work for a different school (that is a different hirer) on different days with the same agency and not yet have completed the qualifying period in relation to that assignment.

The start of the qualifying period

The qualifying period begins with the first week of the assignment. However, it is not backdated to before 1 October 2011, when the Regulations came into force. Therefore, for agency workers who had already begun their assignment before then, the qualifying period began on 1 October 2011 (reg.7(12)).

Breaks in an assignment

The very nature of agency work means that the days worked under a particular assignment are often irregular. There may well be circumstances in which a worker does no work for a hirer in a particular week either because the hirer does not need the agency worker, or because the worker is unavailable. Despite the need for a “continuous” period of 12 calendar weeks, such a break need not send the agency worker back to the beginning of the qualifying period. In a variety of circumstances, an agency worker will be able to carry over the accrued weeks of the qualifying period into the next period of work in the same role for the same hirer.

Weeks counting towards the qualifying period can be carried forward in circumstances where there is a break that is:

  • for any reason and the break is not more than six calendar weeks;
  • wholly due to the fact that the agency worker is incapable of working because of sickness or injury, provided that the break is for not more than 28 weeks (and is not related to pregnancy, childbirth or maternity);
  • related to pregnancy, childbirth or maternity (and takes place during the period beginning at the start of the pregnancy and ending 26 weeks after the birth of the child or when the agency worker returns to work, if earlier);
  • wholly for the purpose of taking statutory maternity, paternity or adoption leave (most agency workers will not in fact have the right to take such leave, but those who are engaged under contracts of employment with the agency will);
  • wholly for the purpose of taking any other statutory or contractual leave to which he or she is entitled;
  • wholly caused by the worker being called up for jury service, provided that the break is for not more than 28 weeks;
  • wholly due to a planned temporary cessation of the need for any worker to attend the workplace and work in the particular role, according to the hirer’s custom and practice (for example, a scheduled shutdown of the workplace over Christmas or for the school holidays); or
  • wholly due to a strike, lock-out or other industrial action at the hirer’s establishment.

The first bullet point above covers the circumstance where the total break between the two periods of work is no more than six calendar weeks, whatever the reason for the break. So, if an agency worker works for a hirer only once every four weeks, for example to help with monthly sales figures, that worker will complete the qualifying period when he or she has worked a total of 12 weeks (even though he or she will reach that point almost a year after the first week of the assignment).

Regulation 7(8)(h) provides that a break caused by a combination of the specified reasons can still allow the agency worker to keep his or her accrued weeks intact, but does not cover a combination including a general break for six weeks or less (the first bullet point above). A break for one of the other specified reasons listed above in combination with a general break for six weeks or less will break continuity.

For example, if an agency worker’s break between two periods of work in a particular role with a hirer is caused by a period of illness, followed by an annual shutdown and then by annual leave, his or her service with the hirer will be preserved. However, if there is, for example, a four-week break caused by illness followed by a three-week break purely because the hirer does not need the agency worker for that period, continuity will not be preserved and the clock will be set back at zero.

The guidance published by BIS does not recognise this point and gives the impression that a break of six weeks or less that is not covered by one of the specified reasons can be added to other breaks and continuity will be preserved. However, the wording of reg.7(8) is clear. While the specific reasons for a break can be combined to form one longer break, where the “no more than six weeks” break is relied on, the whole break must be no more than six weeks, not just that part of the break not covered by the other specific exceptions.

Specific additional continuity rules apply where a worker’s assignment is interrupted or cut short as a result of pregnancy, childbirth or maternity; or maternity, paternity or adoption leave. An agency worker in these circumstances will be deemed to be continuing to work in that role for the hirer for the original intended duration of the assignment, or its likely duration, whichever is the longer.

If, for example, an agency worker is taken on for what is expected to be a one-year assignment, but suffers a pregnancy-related illness after eight weeks and goes off sick, she will be deemed, for the purposes of calculating the qualifying period, still to be working under the assignment and will accordingly complete the qualifying period after 12 weeks even if she is still away from work. She will be entitled to the equality right on her return to work.

In certain circumstances, the qualifying period will continue to accrue during part of a break, then pause for the remainder of the break. For example, if a worker on a 10-week assignment has a period of pregnancy-related illness beginning during the assignment, the qualifying period will continue until the original intended end date, ie until the end of the 10 weeks. The qualifying period will then pause while the pregnancy-related illness continues. If at the end of the period of illness the employee immediately starts a new assignment with the same hirer in the same or a substantively similar role, the qualifying period will be deemed to have paused in the period from the end of the original 10-week assignment period until the beginning of the new assignment. The employee will complete the 12-week qualifying period after working for a further two weeks.

How to manage the 12-week qualifying period

Employers should be aware that the primary responsibility for monitoring the entitlement of an agency worker in relation to the basic working and employment conditions rests with the agency rather than the hirer. It is the agency that pays the agency worker and it is the agency that must ensure that the agency worker is paid the correct amount.

It follows that it must primarily be the agency that monitors whether or not individual agency workers have completed the qualifying period and are thus entitled to the equality right. This makes sense because it is, after all, the agency that is in the best position to know why an agency worker has not been assigned any work or has not been able to accept any work that has been offered.

In most cases the contract between the agency and the hirer will specify how the parties will work together in monitoring whether or not agency workers qualify for the equality right. Where the consequence of the qualifying period being completed is that the agency worker is entitled to be paid more, this will usually result in the hirer having to pay an increased amount to the agency – although this is ultimately a matter for agreement between the agency and the hirer.

Where the agency is able to impose an increased fee on the hirer, it would make sense for the hirer to insist that the agreement with the agency incorporates an obligation on the agency to give appropriate notice to the hirer that a particular agency worker is about to complete the qualifying period. This will allow the hirer to decide whether or not to continue with the engagement, before the increased charge kicks in.

Agencies may also wish to include terms requiring the hirer to give them appropriate information about the duties of agency workers so that the agency can inform its workers when they are embarking on a new role that will mean that they have to begin working towards a new qualifying period.

Anti-avoidance provisions

The Regulations contain a unique set of anti-avoidance provisions designed to prevent agencies and hirers from deliberately structuring the assignments of agency workers so as to exclude them from the equality right.

The anti-avoidance provisions apply only where the agency worker has completed at least two assignments. There is nothing to prevent a hirer from simply ending the engagement of an agency worker just before he or she completes the qualifying period. The problem arises when the hirer or agency does this repeatedly to the same agency worker to prevent the qualifying period from ever being completed.

The anti-avoidance provisions apply:

  • where the agency worker has completed two or more assignments with the hirer;
  • where the agency worker has completed one assignment with one hirer and another assignment with a “connected” hirer, ie associated employers where one has control of the other or both are controlled by a third party; or
  • where the agency worker has worked in at least three roles during an assignment with a particular hirer and on at least two occasions has worked in a role that was not the “same role”.

In any of these situations, where the most likely explanation for the structure of the assignment or assignments is that either the hirer or the agency intended to prevent the agency worker from being entitled to the equality right, the structure of the assignments will not prevent the agency worker from completing the qualifying period and the agency worker will be treated as having completed the qualifying period at the time he or she would otherwise have completed it.

In deciding whether or not the most likely explanation for the structure of the assignments is to prevent the agency worker from being entitled to the equality right, the Regulations provide that the particular matters that should be taken into account are:

  • the length of the assignments;
  • the number of assignments that there have been with a particular hirer or connected hirers;
  • the number of different roles that the agency worker has worked in with a particular hirer or connected hirers;
  • the number of times that the agency worker has returned to work with the same hirer, or connected hirers, in the same role following a break; and
  • the period of any break between the various assignments under scrutiny.

These are unusual and complicated provisions. The following examples may help to illustrate how they are likely to work.

Example: A hirer needs an agency worker to do 20 weeks’ work. However, to avoid having to pay the agency worker the going rate for employees, the hirer engages the worker for just 11 weeks, and again for nine weeks, after a seven-week gap between the two assignments.
Result: When the second assignment is completed, the worker will be deemed to have completed the qualifying period after having completed 12 weeks’ work – and will be due an appropriate level of pay for the remaining eight weeks.

Example: A hirer has an ongoing need for agency workers to fill in gaps caused by holiday and sickness. An agency worker works for six weeks followed by an eight-week gap and then another six weeks followed by a seven-week gap – and finally works for a further four weeks.
Result: Because the hirer has engaged the agency worker on the basis of genuine need and not to avoid the equality right, this agency worker will not be deemed to have completed the qualifying period.

Example: Two companies within a group arrange to “swap” agency workers every 11 weeks in order to prevent any of them being engaged by the same hirer for more than 12 weeks.
Result: Once each agency worker has completed the second assignment, he or she will be entitled to the equality right from the end of the first week of the second assignment.

Example: A hirer values the work of a particular agency worker but does not want her to be paid as much as employees. Whenever she has been on a particular role for 11 weeks, she is moved to a brand new role and told that she is now at the beginning of a new qualifying period.
Result: Once the agency worker embarks on the third role she will be deemed to have completed the qualifying period after the first week in the second role, as the reason she has been moved around is that the hirer is trying to avoid her acquiring that right.

The author: Darren Newman is a Director of In-Company Training Services Ltd. He is consultant editor for the XpertHR Employment Law Bulletin.

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