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Agency Worker Regulations – are workers placed on an indefinite basis with an end user covered?

The Employment Appeal Tribunal (EAT) has recently confirmed the limited application of the Agency Worker Regulations (AWR) to “temporary” rather than “indefinite” placements in Moran v (1) Ideal Cleaning Services Ltd (‘Ideal’) (2) Celanese Acetate Ltd (‘Celanese’).

The claimants were for many years supplied by the employment agency to the hirer. One of the claimants had worked for the same hirer through the employment agency for 25 years.

After the AWR came into force, the claimants claimed that they were entitled to equal pay with permanent workers of the hirer, as ‘qualifying’ agency workers.

The definition of ‘agency workers’ in the AWR refers to workers ‘supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer’.

The Employment Tribunal (ET) held that the claimants did not fall within the above definition as whatever might have been the intention of the employment agency and the hirer what had occurred could not conceivably be described as temporary given the longevity of the arrangement.

However, when the claimants appealed the Employment Appeal Tribunal (EAT) did not place significant emphasis on the long-term duration of the arrangement, it emphasised that the AWR apply only to workers assigned temporarily to end-users rather than indefinitely.

The EAT dismissed the appeal and held that the claimants were not ‘agency workers’ as defined by the AWR as they were not supplied by the employment agency to work temporarily, but to work indefinitely.

In other words, the AWR will only apply to agency workers engaged on temporary contracts which by their nature are terminable upon some other condition being satisfied, for example the expiry of a fixed period or the completion of a specific project. AWR will not apply to agency workers engaged on indefinite contracts which by their nature are open-ended in duration and therefore considered permanent.

Whilst the EAT was adamant that the word ‘temporary’ was intended to have legal significance and should be given effect as such, it was acknowledged that the protection afforded by AWR to agency workers was now significantly reduced as a result of their decision.

The implications of the decision are potentially significant as agency workers placed for indefinite periods will not be able to claim comparable basic pay and benefits to the employees of the hirer.

The decision is a surprising one to many of those who place or engage agency workers given that it has the potential to significantly limit the scope of AWR to such an extent it could make it largely toothless and many are treating it at this stage with some caution as it will probably not be the last word on the issue.

 

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further