Who counts as a temporary worker?

Temporary and agency workers fall under the category of non-permanent staff. This can also include:

• Short-term employees;
• Short-term self-employed workers;
• Casual workers;
• Agency workers contracted by an employment agency or business.

If hiring staff on a temporary worker or employee basis, you must take into consideration their employee rights according to UK legislation. The applicable law came into play on 1 October 2011. Whether the person you recruited falls under this legislation depends on the following circumstances:

• The employment status of the worker;
• They are defined as a ‘worker’;
• They qualify for employee rights due to having completed any required continuous employment.

It is important that you are able to distinguish between employee, worker and independent contractor. This is because the law around these three categories is different. There are full-time contracts, part-time contracts, zero-hours contracts, fixed-term contracts, temporary contracts, contracts with freelancers and lastly agency contracts. Agency contracts are those relevant to temporary and agency workers who are currently working for your business. Many businesses choose to take on agency workers from employment businesses; these are frequently secretarial or administrative staff, but there are employment businesses across many sectors.

Differences between workers and employees

Whether your hire is a worker or employee can be decided through common law tests. Employees fall under a binding contract, while workers do not. Workers have fewer rights than employees, but are entitled to receive the national minimum wage, breaks and paid annual leave, and part-time workers receive some protections. After 12 weeks of working for you, they gain many of the equal entitlements that your employees in the same role or pay scales have.

Employment agencies vs employment businesses

Although they may sound similar, you should consider the key differences between employment agencies and employment businesses.

Employment agencies

Employment agencies are not responsible for paying a worker after they are introduced to your business. They find permanent employment for candidates, who are contracted as employees to a business, gaining the rights of an employee.

Employment businesses

Employment businesses are responsible for paying the workers that they have supplied to your business. Employment businesses will send temporary workers out to your business to work for you to complete a fixed-term assignment. Temporary workers are paid by the employment business themselves. Temporary workers hired through an employment business receive the same rights as the employees of the business they are recruited to work at. Workers can find out if they are temporary or not through the written documentation that their agency has supplied them with. Confusingly, sometimes employment businesses can also be known as temporary work agencies; it is useful for you to know that this is how they are described in the Agency Workers Regulations 2010.

What to do if you are recruiting an agency worker

If you are hiring a worker from an agency, then you must provide the agency you are hiring from with the correct terms and conditions for that agency worker. This is to ensure that they receive equal treatment to your employees after 12 consecutive weeks in the role, in accordance with the legislation.

Agency Workers Regulations and temporary workers

Agency and temporary workers are entitled to the same working conditions and pay as permanent, employed staff, according to the Agency Workers Regulations 2010 (AWR). This includes all temporary workers, except for single-person personal services companies, such as recruiting a person who is a limited company providing the services of one contractor. You may be wondering if temporary workers can be dismissed after 11 weeks in order to avoid the Agency Workers Regulations 2010. The answer is that you can dismiss someone working for you for whatever reason as long as they are not an employee; only employees with a permanent contract with you can make a claim for unfair dismissal.

What do equal treatment rights look like?

Agency workers and temporary workers can have two types of rights depending on how long they have been working with you for. These include rights that come into force from day one, as well as week 12 rights.

Stage 1 rights for temporary and agency workers

Stage 1 rights come into place on the first day of their hiring, so you must fulfil them on day one of their first assignment. These include access to your facilities, which can include canteen, crèche, parking and gym, if employees with the same role are allowed access to them. Conversely, if employees at the same hierarchical level as agency workers are not allowed access to certain facilities, then agency and temporary workers will not have access to them either.

Temporary workers and agency workers are also entitled to the following rights:

• Deductions from wages cannot be made unlawfully;
• You cannot discriminate against them on the basis of sex, race, religion or orientation according to the Equality Act 2010;
• They have the right to work in a workplace that is safe;
• They can be accompanied at grievances or hearings.

You should also give temporary workers information about any suitable permanent vacancies that become available. This does not mean you have to interview or hire them; it just means that you should make sure that this information is equally available to temporary workers and permanent employees.

Week 12 rights for temporary and agency workers

Once your temporary worker or agency worker has been working with you for 12 calendar weeks, another set of rights comes into play according to the AWR. These rights come into effect as long as this worker has been with you consecutively for 12 weeks in the same role.

They include:

• Equal pay;
• Enrolment in the same pension scheme;
• Paid annual leave.

This means that they will receive the same basic working conditions as those of your permanent employees. Agency and temporary workers should receive the basic 5.6 weeks of statutory holiday paid leave that your employees also have. Equal pay includes:

• Basic pay; the annual salary that is paid to your employees;
• Overtime pay;
• Unsocial hours pay;
• Annual leave pay;
• Bonuses or commission payments;
• Vouchers and/or stamps that your employees receive that do not replace their salary, such as lunch or childcare vouchers.

You should make sure that this consecutive 12-week period is counted from the first day that your temporary worker started their assignment with you. You should not take into consideration a temporary worker’s holiday or sick leave when calculating this period, or any of the following occurrences:

• Six weeks’ break or less;
• Workplace closing for Christmas;
• Annual leave;
• Industrial action;
• They are on jury service for up to 28 weeks;
• They are on sick or injury leave for up to 28 weeks.

You should, however, still count time off during pregnancy, paternity or adoption leave, including pregnancy leave for up to 26 weeks after childbirth. A temporary worker’s 12 weeks will reset to zero, and will have to count from the new start date if:

• They get a job at a different workplace to yours;
• They have a six-week break between different jobs at your workplace;
• They take on a substantially different role at your workplace during the 12-week period.

It is worth bearing in mind what constitutes the 12-week period here, so that you know when an employee is ready to receive equal treatment to that of your employees. Keep a record of when the 12-week period began, and whether it has been reset at any point.

What rights do agency workers not have?

There are a few rights that agency workers are not entitled to, that your employees are.

These include:

• Statutory and contractual redundancy pay;
• Unfair dismissal;
• Maternity, paternity and parental leave (although you may choose to offer this);
• Employment terms and conditions;
• Occupational pensions (agency workers receive automatic pension enrolment from October 2012);
• Occupational sick pay.

Therefore, it is important to consider all of the rights that your temporary and agency workers do and do not have during the entire time frame that they are working with you.

The tax status of workers supplied to businesses via employment businesses

Employment businesses need to look at whether workers that they have supplied to businesses are deemed taxable either as self-employed or under PAYE due to being considered an employee of the employment business itself. If the worker is supervised, then they must be taxed as an employee of the employment business. Therefore, the temporary worker’s payment is subject to PAYE and National Insurance contributions.

What to do if you do not have employees of a comparable status to your temporary workers

If you do not have employees of a similar status or hierarchical role to that of your temporary workers, you will still need to adequately assess which rights they have in your organisation. Consider instead similar pay scales already established in your business, or market rates for that role.

Self-employment and umbrella companies under the Agency Workers Regulations 2010

Someone who is self-employed will not be considered an agency worker; in this case, Agency Workers Regulations 2010 will not apply to them. According to the UK government, self-employed workers can still receive protections against discrimination in specific cases, and should receive the exact same health and safety protections as your employees and workers. However, umbrella companies supplying workers do fall under the Agency Workers Regulations 2010.

Temporary worker entitlements to permanent contracts

You might be wondering if temporary and agency workers are entitled at any point to receive a permanent contract with you. In fact, you are not obliged to offer agency workers a permanent contract, regardless of how long they have been working for you.

You might have a time frame that you give to temporary workers whereby after three months or six months working for you, their role becomes permanent or you can dismiss them. These are known as temp-to-perm positions, and it is useful to advertise your roles as such, as this can be highly desirable to agency candidates.

Your workers have the right to be informed about any permanent contracts that become available in your workplace, with the same information about the role given to them as that provided to your employees. This can be via an email or accessible to all workers via the staff intranet.

Temporary workers and agency workers have some rights equal to that of your permanent employees that you should be aware of. Make sure that you record how many weeks your worker has been working for you, including the day that they started, so that you can work out which rights they have. These rights are part of important legislation – Agency Workers Regulations 2010 – so you must make sure that you strictly follow these when hiring agency and temporary workers for your business.

Some rights will be available to them from day one, such as equal access to facilities, but by week 12, they will have many more of the rights that your permanent employees have, such as equal pay and annual leave. Likewise, you should be aware of which entitlements your workers do not have, in comparison to your employees, such as statutory redundancy pay and the ability to appeal for unfair dismissal.