Employment through agencies

The Employment Agencies Act 1973

Agency employment prior to the Employment Agencies Act 1973 was limited in the protection it gave to employees but this Act regulated the conduct of such agencies and recent legislation has strengthened these rights even further. The main provision of the Act was to ensure that businesses that set themselves up as an employment agency must have a license that can then be revoked if necessary. It applied to all businesses managing both permanent and temporary employment and included stipulations relating to no fee charging and advertising.

Basic Rights of Agency Employees

Regardless of whether or not the person is legally an employee of the company (they could otherwise be classed as a worker hired out to perform a service), they will still have certain basic rights.

For instance, all agency workers have the same rights under health and safety law. Firstly, the company where the worker carries out the labour must be held responsible for providing a healthy and safe working environment as they would for their own employees. Secondly, the agency must be held responsible for placing the worker in such employment as they are appropriately qualified for.

Discrimination law covers agency workers both in terms of working for the agency itself and the company where the work is carried out. Agency workers must be paid the National Minimum Wage and they are entitled not to have to work an average of 48 hours a week unless an agreement is signed between the worker and the agency. All agency workers are entitled to join a trade union should they wish.

The other basic rights that agency workers are entitled to are the right to paid by the agency on the agreed day whether or not the hiring company has paid the agency at this point. The agency worker must also be consulted if any changes are to be made to the terms of employment or to the terms and conditions of employment.

Paid Leave

Holiday pay is a grey area with employment agencies. Agency workers should receive four weeks paid annual leave once they have completed 13 weeks of work for the agency. However, some agencies claim that the pay includes holiday pay and so try to circumvent this aspect of the law. It is unclear legally whether they are right not to pay any extra if agency workers take a break. Other agencies put aside a small percentage of the worker’s earnings each week which they can claim back as a lump sum; a substitute for holiday pay.

In terms of statutory maternity or paternity pay, an agency worker may be entitled to receive this pay but it will depend on their earnings and how long they have worked for the agency.

Accepting permanent employment at the hiring company

A temporary agency worker who has been offered a permanent position at the hiring company may accept such a post. They must however work the agreed notice, usually a week, for the agency in the placement before becoming permanent. Often there is a lump sum involved that the hiring company, and as such prospective employer, must pay to the agency in order to release the agency temp from the contract.