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Specialist employment law Partner, Matthew Kilgannon, discusses last month’s first Employment Appeal Tribunal (EAT) decision on parity of terms for Agency workers.
Under Regulation 5(1) of the Agency Workers Regulations 2010 (AWR 2010) an agency worker shall “…be entitled to the same basic working and employment conditions…” as if they had been employed direct by the hirer.
This right only applies once an agency worker has 12 continuous weeks service with the hirer, and it only applies to certain terms and conditions; rest breaks, pay, working time and annual leave.
Angard Staffing Solutions (an employment agency) employed Mr Kocur and supplied him to Royal Mail for more than 12 weeks. Mr Kocur’s terms were different from Royal Mail employees, in that:
Employment Tribunal (ET) Decision
The ET found that while Mr Kocur had some less generous terms, these were compensated for by the higher hourly rate of pay and, consequently, there was no breach of the AWR 2010.
It concluded that Mr Kocur could take 2.5 days unpaid leave (to achieve 30.5 days holiday) and still be financially better off overall. Equally, over an eight hour shift, he would be entitled to an hour break (paid for just 30 minutes of it) and still earn more than a Royal Mail employee.
The ET also concluded that because Royal Mail employees did not all work the same number of hours per week, it was impossible to identify an appropriate comparator.
Mr Kocur appealed to the EAT and was successful. The EAT upheld his appeal in relation to annual leave and rest breaks.
The EAT concluded that “the same” in s5 of the AWR 2010 should be interpreted to mean “at least”. This way, it does not prevent agency workers from having more attractive terms (which the EAT expected given the unpredictable and irregular nature of their work). Such an interpretation imposed a floor, but not a ceiling.
It disagreed that being able to take 2.5 days unpaid leave was an “entitlement” in accordance with s5 AWR 2010, as it could not be enforced. It may also make the worker less attractive if s/he was to take such time off during an assignment. The EAT found that such difference in annual leave could not be compensated by a higher hourly rate, as this is not provided for in the AWR 2010.
Interestingly, the EAT went on to comment that it would be possible for less holiday to be given, provided such difference was clear and transparent and was compensated. The EAT expressed the view that rolled-up holiday pay or a lump sum payment at the end of the assignment would suffice provided it is clearly explained and paid. However, Mr Kocur’s terms were not transparent and so were found to be unlawful in this regard.
In relation to only being paid for a 30 minute rest break, the EAT found this too was a breach of s5 AWR 2010, largely based on a lack of clear explanation from the Royal Mail and Angard as to why this was imposed, but also because looking at the overall earnings for a shift ignored the AWR 2010 that required terms relating to rest breaks to be the same as employees of the hirer. Again, the EAT indicated the difference could be compensated if it was transparent, but this was not the case here.
This is the first significant decision in relation to the difference in terms under s5 AWR 2010, and it provides some helpful guidance on how to treat agency workers compared to direct employees.
It means that terms now need to be looked at individually, and it will be harder to look at the package as a whole. This brings it in line with other areas of employment law, such as, discrimination.
What is also of great interest is the EAT’s comments that agency workers can have different terms if the difference is transparent and compensated. Its reference to rolled-up holiday pay would seem to contradict established thinking that such practice is unlawful (following the Robinson-Steele case). Adopting this approach also has limitations, as not all benefits/terms can be compensated. As such, ensuring agency workers have parity is the safer approach.
Contact Matthew Kilgannon on 01483 411517 or firstname.lastname@example.org or another member of our employment team if you have any questions about the content of this article or any other employment issue.