Impact of Agency Workers Regulations: the 2012 XpertHR survey

Author: Rachel Suff

In this article on the 2012 XpertHR agency workers survey, we examine the impact of the Agency Workers Regulations on employers' use of temporary staff.

Key points

  • For two organisations in three (65.1%), there has been no change in their use of agencies to help find temporary staff since the introduction of the Agency Workers Regulations 2010, although the use of agencies has fallen in 22.1% of organisations.
  • Regardless of the 12-week qualifying period for basic working and employment conditions, two employers in three (64.4%) provide agency workers with the same conditions as permanent staff from day one of their assignment.
  • More than one respondent in three (36.2%) said that their organisation tries to limit assignments for temps to less than 12 weeks, where possible.
  • Almost nine employers in 10 (87.9%) have taken steps to inform line managers of the hiring organisation's new legal obligations under the Agency Workers Regulations.
  • The majority of employers think that the Regulations have placed a significant administrative strain on their organisation and that the increased cost of using temps means their organisation is less likely to use them now and in the future (55.5% and 51.7% respectively).

It was predicted that the introduction, in October 2011, of the Agency Workers Regulations 2010 would affect employers' use of employment agencies to source temporary staff. We examine if and how the Regulations have affected employer practice in this respect.

The full data from this survey is available on XpertHR Benchmarking.

Although the new legislation has not had a detrimental impact on employers' resourcing capability overall, most (55.5%) respondents are of the view that the Regulations have placed an additional administrative burden on their organisation. The majority (51.7%) of employers also believe that the increased cost of using temps means that their organisation is less likely to use them now and in the future.

A second report on the use of agency workers will examine the working relationship between employers and employment agencies, including whether or not agencies represent value for money and the quality of communication between the agency and hiring organisation.

Employers' use of agencies

More than half (51.3%) of the 160 employers taking part in this XpertHR survey use employment agencies frequently to help find temporary staff. A further four employers in 10 (41.9%) use them occasionally, so there is extensive experience of using agencies on the part of our sample of organisations.

We asked respondents whether or not their organisation's use of employment agencies to help find temps has changed since the introduction of the Agency Workers Regulations. For two organisations in three (97 employers) there has been no change, although the use of agencies has fallen in 33 organisations. These findings suggest that the Regulations have had a significant, but not drastic, impact on the extent to which employers make use of employment agencies to help find temporary staff.

See chart 1 for a summary of the full findings in relation to employers' changes in the use of agencies since the introduction of the Regulations.

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Types of roles for temporary staff

Employers turn to employment agencies to help them find staff to fill a wide range of temporary roles. The five most common types of roles are:

Audio: Impact of Agency Workers Regulations

Listen to Rachel Suff, author of the report, and employment law editor Bar Huberman discuss the findings of the agency workers survey.

This is taken from an episode of the XpertHR Weekly podcast.

  • clerical and secretarial (eg, administrative) - 67.8% or 101 employers;
  • operative and assembly work (eg, process and plant operatives, assemblers, routine operatives, drivers) - 46.3% or 69 employers;
  • professionals (eg, engineers, IT professionals, doctors, dentists, vets, teachers, lawyers, business professionals, architects, librarians) - 42.3% or 63 employers;
  • associate professional and technical roles (eg, technical, IT service delivery, nurses, paramedics, artists, sports people, paralegals) - 28.2% or 42 employers; and
  • craft and skilled jobs in manufacturing (eg, metal, welding, machining, vehicle trades, electrical trades, construction, textiles, printing, food preparation) - 17.4% or 26 employers.

An analysis of the types of temporary roles recruited according to sector reveals that public-sector organisations are much more likely to use agencies to help them find staff to fill both personal and protective services, and professional roles. Unsurprisingly, manufacturing and production firms are much more likely to source temporary workers for operative and assembly work through employment agencies (see chart 2 for a summary of our findings).

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Agency workers' entitlement to collective facilities

Under the Agency Workers Regulations 2010, from day one of their assignment an agency worker has the right to be treated no less favourably than a comparable directly employed worker in relation to the hirer's collective facilities and amenities, such as childcare and parking facilities. Agency workers also have the right to be informed about relevant vacancies with the hirer from day one of their assignment.

More than eight employers in 10 (85.9%) inform agency workers on an assignment in their organisation of their entitlement to these collective facilities and amenities.

Two-thirds (66.4%) of the 128 organisations that inform agency workers of these rights do so as part of an introductory session for the agency worker. Employers use an average of two different methods to impart this information, with line managers having the responsibility in 47.7% of organisations (see chart 3).

The Regulations do not prescribe how a hirer should inform agency workers of relevant vacancies, but state that the hirer "may inform the agency worker by a general announcement in a suitable place in the hirer's establishment".

To fulfil the obligation of informing agency workers of any relevant vacancies that arise with the hiring organisation, one organisation in three (34.4%) makes its vacancies bulletin available to all temps.

Chart 3

Entitlement to basic working and employment rights

Under the Regulations, after completing a 12-week qualification period, agency workers have the same entitlement to basic working and employment conditions as if they had been recruited directly by the hirer into the same role. These include:

  • prescribed elements of pay;
  • duration of working time (eg if working is limited to a maximum of 48 hours per week);
  • night work;
  • rest periods and breaks; and
  • annual leave.

We asked respondents if, regardless of the 12-week qualifying period for basic working and employment conditions, their organisation typically provides the same conditions for agency workers from day one of their assignment. Two employers in three (64.4%) said that they do. Although this approach may carry with it increased budgetary implications, it has the advantage of removing any ambiguity or administrative resource concerning when an agency temp should receive these basic working and employment conditions.

There is an onus on the hiring organisation to keep track of exactly when a temporary worker completes the 12-week qualifying period and becomes entitled to receive the same conditions and, in 45.6% of organisations, there is a system in place to do so. In a further 34.2% of cases, all temp hires are managed centrally, which implies there is a central tracking system in place.

In 17.4% of organisations there is no framework in place however, just over half (14 employers) of this group offer the same conditions from day one.

Anti-avoidance measures

One way to avoid giving agency workers the same basic employment conditions as the hiring organisation's directly recruited comparable employees is to structure assignments so that the temp does not complete the 12-week qualifying period.

As the guidance (PDF format, 330K) (external website) on the Regulations produced by the Department for Business, Innovation and Skills (BIS) makes clear, there are anti-avoidance measures to help prevent this kind of tactic.

For example, the anti-avoidance measures will be triggered if: the agency worker has completed two or more assignments with the same hirer; or one assignment with an organisation and at least one assignment with a connected organisation; or has worked in more than two roles during an assignment with the hirer, and on at least two previous occasions has worked in a role that was substantively different to his or her previous role.

More than one respondent in three (36.2%) told us that their organisation tries to limit assignments for temps to less than 12 weeks, where possible. According to the interpretation of the Regulations in the BIS guidance, there is nothing in the Regulations to prevent an agency worker being released after, say, 11 weeks, or for assignments of 12 weeks to be the usual practice of any hirer (and not using that agency worker again). However, hiring organisations should be aware of anti-avoidance provisions that address any situation where a pattern of assignments emerge that are designed to deliberately deprive an agency worker of their entitlements.

Information requests from temporary workers

An agency temp who considers their rights in relation to collective facilities and amenities and relevant vacancies have been breached has the right to make a written request to the hirer for information relating to the same treatment as a comparable worker.

An agency temp can also make a written request to the employment agency about their entitlement to the same basic working and employment conditions as a directly recruited employee after completing the 12-week qualifying period. If the temp has not received a response from the agency within 30 days of making their request, they can redirect it to their hiring organisation.

We asked employers if they had received any requests from temps for information about their day-one or equal-treatment rights. It is still early days since the introduction of the Regulations and so it is unsurprising that a low number of organisations have received such requests; 8.1% in the case of basic working and employment conditions and 5.4% about day-one rights (see chart 4).

Chart 4

Identifying a comparator

As the guidance (PDF format, 330K) on the Regulations produced by BIS makes clear, deciding what "equal treatment" means will usually be a matter of common sense - the basic requirement is simply to treat the worker as if he or she had been recruited directly into the role. It is important to note that an agency worker does not need to be able to point to a comparable employee to exercise his or her right to the same treatment in relation to basic working and employment conditions.

Chart 5

However, the hirer will be deemed to have complied with the Regulations on basic working and employment conditions if it identifies an appropriate comparator and treats the agency worker in the same manner. The comparator must, among other things, be an employee and be engaged in "broadly similar work" although, where relevant, account can be taken of whether or not they have a similar level of skills and qualifications as this may justify a higher level of pay for the comparator. They must work at the same or, if there is no comparable employee in the same workplace, in another of the hirer's workplaces.

We asked respondents how easy their organisation finds it to identify a comparator and three employers in four (76.3%) find it either quite easy or very easy (see chart 5).

Role of line managers in managing agency staff

Line managers are central to the implementation of most people-management activities and managing agency workers is no exception. It makes sense that almost nine employers in 10 (87.9%) have therefore taken steps to inform line managers of the hiring organisation's new legal obligations under the Agency Workers Regulations 2010.

As chart 6 shows, the most common method of informing line managers of the legal framework governing agency workers is as part of a line manager briefing session, followed by senior management cascading this information to line managers.

Public-sector employers are far more likely to post guidance on the intranet compared with private-sector-services and manufacturing and production companies (86% of employers against 30% and 18%, respectively).

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Impact of the Agency Workers Regulations

The majority of respondents (63.5%) told us that the Agency Workers Regulations 2010 have made no difference to how their organisation uses temporary workers.

Dig a little deeper and there have been some changes on employers' experiences, however. For example, more than half think that the Regulations have placed a significant administrative burden on their organisation and that the increased cost of using temps means their organisation is less likely to use them now and in the future (55.5% and 51.7% respectively).

Nonetheless, three employers in four (76.7%) disagree with the statement that "the Agency Workers Regulations have had a detrimental impact on my organisation's resourcing capability".

Our research

This report is based on original research that Rachel Suff and Katey Ward conducted in January and February 2012. The research obtained information from 160 employers about their use of agency workers. The employers taking part in our research have a combined workforce of more than 350,000.

The breakdown by economic sector of the employers is as follows: 54.4% are private-sector-services organisations; 25% are manufacturing and production organisations; and 20.6% are public-sector organisations.

Broken down by workforce size, the employers comprise: 38.8% that have one to 249 employees and are classed as small and medium-sized enterprises; 31.9% that have 250 to 999 employees and can be considered as large employers; and 29.3% that have 1,000 or more employees and can be considered very large employers.