Why Agency Workers Should Expect a P45 for Christmas

Personnel Today, citing the CBI Employment Trends report, reports that the Agency Workers Regulations (AWR) that came into force on 1st October, have apparently led to employers reducing the number of temporary workers they employ.  The CBI calls for an “early review” of the AWR to ensure it is not making the UK uncompetitive and to remove any “gold-plating”.

The AWR provides that Agency Workers must be given equal pay and conditions once they have achieved 12 weeks service with the end user.  They weren’t retrospective, so it is only service since 1st October 2011 that counts, meaning that any employers wanting to avoid the impact of the AWR will have to terminate temporary workers’ contracts by next 24th December, being the 12th week since the AWR came into force.  I was speaking to someone the other day in just this situation. Note the date.

What remedies does the temporary worker have, if their contract is terminated in these circumstances?  Not much is my view, assuming that there are no allegations of discrimination involved in the termination.  The problem with the AWR is that it doesn’t resolve the issue, highlighted in cases like Dacas v Brook Street and James v Greenwich Borough Council, of whom the worker should sue in the event that they feel they have been unfairly dismissed.

In these cases, the worker will usually have signed a contract for service that states he or she is self-employed.  The employment business (ie the recruitment agency) will have a separate contract with the business that needs the work doing and the worker will probably not even have a copy of that agreement.  The worker will, of course, be working for the end-user and the only link they will have with the employment business will be the time sheet they submit and the payslip they receive at the end of the month.  Consequently, if the end user decides they no longer need the worker they can end the contract when they want.  The worker is not employed by the end user (although in some limited cases it may be possible to argue that there was an implied contract of employment between the two but that is very fact sensitive) and is not employed by the employment business, meaning that they have no protection from unfair dismissal.

This is not usually an issue for genuinely temporary workers because they won’t acquire the required 12 months continuous employment experience in the first place.  But some “temporary” workers can spend years working for an end user and they are in a vulnerable position.

In the current climate of reducing red tape and reforming the UK’s supposedly onerous laws don’t expect that to change.

Michael Scutt, Employment Solicitor 

Employment solicitor with Crane and Staples, Welwyn Garden City, Hertfordshire. Blogger & writer. I like cycling, cricket, football and history.