The government has recently introduced changes to the regime affecting the rights and entitlements of agency workers which have significant implications for those businesses which employ them. Our Employment team provides an overview of the changes and prospective changes.

The government has recently introduced changes to the regime affecting the rights and entitlements of agency workers which have significant implications for those businesses who employ agency workers.

The government commissioned The Taylor Review of Modern Working Practices with the aim of making recommendations to improve working life and employment rights, with a particular emphasis on temporary workers such as agency workers.

The ‘Swedish Derogation’ to the previous regime of regulations allowed agency workers to be paid less than full-time employees where they had a permanent contract of employment with the employment agency and were paid between assignments. However, this is one of the exceptions which is affected by the recent changes.

We have recently advised clients regarding their obligations under the new regime, and the importance of taking remedial action to ensure compliance with the new rules moving forward to avoid any potential employment claims.

April 2020 changes

With effect from 6 April 2020 a number of changes have been implemented by the government, including:

• the Swedish Derogation has been abolished, meaning those agency workers with 12 weeks’ continuous service have a right to equal pay compared to those workers employed full time by the company;
• all agency work-seekers are entitled to a ‘Key Information Document’ setting out the terms on which they will be employed;
• all workers have the right to receive an itemised payslip each month; and
• the pay reference period under the Working Time Regulations for calculating holiday pay has been extended from 12 to 52 weeks.

These changes will clearly have a significant impact on those companies who employ agency workers, and advice should be sought to establish whether your company’s arrangements comply with the recent legislative changes and exhibit best practice.

Prospective changes

The Taylor Review also suggested further changes such as giving all agency workers the right to request a more stable contract after 26 weeks’ service.

The government has suggested that further reforms may be enacted through a new Employment Bill. We await to see the exact manifestation of any further changes, but the government has clearly set its sights on improving agency workers’ rights and so employers should watch this space carefully for future updates in order to ensure they remain compliant.

Our specialist Employment team are here to help with any queries you may have and are able to provide advice to ensure compliance with the latest legal developments.