I have been told by one of my agency staff that the law changed at the end of October so that agency workers on contracts of less than three months will be entitled to statutory sick pay. Will I have to rewrite their contracts and include this as a term of employment, or is the agency responsible for it?
In 2007, the Court of Appeal in The Commissioner for Her Majesty’s Revenue & Customs v Thorn Baker Limited upheld the High Court’s decision that agency workers whose agency contracts are for a specified period of three months or less were not entitled to statutory sick pay.
That court ruling meant that agency workers with contracts of three months or less were the only group of workers excluded from entitlement to statutory sick pay (SSP), despite qualifying for other statutory payments.
For many agency staff in this situation, that decision appeared unjust, and they pointed out they were still expected to pay Class 1 National Insurance contributions, so were not benefiting elsewhere from their agency status. There were some exemptions to this general rule, but on the whole, the position seemed unfair.
That position was rectified by the introduction of the Fixed-Term Employees (Prevention of Less Favourable Treatment) (Amendment) Regulations 2008.
These regulations came into force on 27 October and amend the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, so that agency workers on contracts of less than three months will be entitled to receive SSP.
As this is a statutory provision entitling agency workers to SSP, there is no specific requirement for you to amend any agreements that are already in place with your current agency staff. SSP will be payable to agency workers regardless of what is contained in any agreement or contract you may have already drawn up.
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In terms of practicalities, agency staff will be regarded as the employees of the agency (or employment business) for SSP purposes. Whether the agency can then recoup any payment made from the end user will very much depend on the terms of the agreement between those two parties. However, my advice to you would be to review any new and existing agreements in light of these new regulations, and ensure that they comply fully with the new law.
Philip Pepper, associate, Weightmans
