Agency workers get greater work rights from 1 October

Agency workers are set to gain additional rights in pay and benefits under new rules that come into force on Saturday.

Workers will gain similar rights to permanent staff once they have completed 12 weeks of service doing comparable work.

Business groups have suggested the changes could cost firms up to £2bn a year.

There are an estimated 1.4 million agency workers in the UK.

Stefan Martin, an employment lawyer with law firm Allen & Overy, said: "It won't give them equal rights in terms of protection from dismissal."

"What it is going to give them is equal rights in relation to pay and other basic employment rights.

"It's going to be extra basic pay, [and] extra shift allowances potentially, where those workers are not paid at the same level as the equivalent permanent employee," he told the BBC.

Rights

Various legal protections are already in place for agency workers, as they are with permanent full-time and part-time staff. They include the minimum wage and basic holiday rights.

Under the new European rules, which come into force in the UK on 1 October, agency workers will be allowed to use some of the same facilities as staff.

For example, from the first day of employment, they can use a creche, canteen or transport services. They will also be entitled to information about internal vacancies at the company they are working for, and to be given the opportunity to apply for them.

After 12 weeks in the same role with the same employer, agency workers will be entitled to the same employment and working conditions as permanent staff.

These include pay, overtime, shift allowances, holiday pay and bonuses attributable to individual performance, as well as maternity rights.

However, agency workers will not be entitled to all the same benefits, such as occupational sick pay, redundancy pay and health insurance.

The rules are being brought in after long negotiations between unions and the government.

A survey of agency workers for the TUC found that some felt they were missing out on holidays, pay and overtime payments.

However, some business groups such as the Forum for Private Business suggested that the new rules would make the labour market less flexible and that job creation and recruitment would suffer.

Cut-off

There have been fears that some agency workers will simply be laid-off after 11 weeks so they do not benefit from the increased rights.

A company must not employ these workers again for another six weeks.

However, if a pattern emerged of an employer repeatedly only having 11-week jobs, then an individual could take a case to tribunal where fines of up to £5,000 could be handed out.

"These penalties are for each individual agency worker taken on. If employers do not get their house in order the financial implications could be serious," said James Wilders, from Dickinson Dees law firm.

Exemption

Options for employers could include creating their own bank of temporary staff.

They could offer a cash sum which they felt covered the extra benefits that should be available.

Alternatively, workers could be employed as a member of permanent staff by an agency, under an exemption from the new equal treatment rules known as a "pay between assignments" contract.

In this case, the worker would receive pay from the agency, even when a lack of suitable work meant they were not working.

But the new 12-week rule, granting equal pay, would not apply.

This agency would have to explain in advance that this meant forgoing the right to equal pay, though the "pay between assignments" would only have to be 50% of pay while on assignment, though it would still need to meet the minimum wage rules.