8 September 2011 | Sarah Gill & Caroline McNally

New agency staff rules come into force on 1 October

1. Find out what the regulations will mean for your business. Identify what terms and conditions will need to be given to agency workers who qualify. For example, you will need to consider what will be covered by “pay”. You may want to consider how benefits are currently structured as this may affect whether or not they are caught by the definition of “pay” under the regulations.

Assess the potential cost of agency workers obtaining the right to “equal treatment” under the directive and the hassle factor of keeping an eye on when they qualify. How is your business going to build the necessary checks into your current systems?

2. Review existing agency contracts to identify what (if any) protections they afford and where there are gaps. You could ask: under what arrangements are current agency workers supplied to the business? Are the current arrangements caught by the regulations? Are the workers employed by the agency? If so, are they paid between assignments? What do their existing terms and conditions say? What would you be liable for?

3. Consider whether you can terminate existing contracts and on what notice, and whether it is better to terminate and retender than to allow the current arrangements to continue. Bear in mind terminating contracts, even those with termination for convenience provisions, may trigger exit provisions or incur liability. You must ensure that this risk has been taken into consideration.

Alternatively, renegotiate terms with current providers to take account of the Regulations. New structures may involve a cost or risk increase for the provider that they may seek to pass on. Without the protection of existing contractual arrangements, these negotiations will be subject to commercial and market forces.

If appropriate, consider obtaining warranties from the agency confirming that the regulations do not apply to the agency workers and/or indemnities to cover the risk that “equal treatment” will apply. Ensure that any new contracts entered into address the Regulations and the provision of workers is structured appropriately.

4. Subject to the anti-avoidance provisions contained in the Regulations, consider engaging agency workers in different ways, for example, direct hires on short-term contracts or zero hours contracts.

5. Review whether there are any facilities that you offer to permanent staff that you will need to give agency workers access to from 1 October. Consider what arrangements you have in place to make sure agency workers are aware of vacancies for permanent employment within 
your organisation.

* Sarah Gill is 
an employment associate and Caroline McNally is a commercial associate at Wragge & Co