Agency Workers Directive Update: June 2012

On 16^th May 2012, President Michael D. Higgins signed the Protection of Employees (Temporary Agency Work) Act 2012 into legislation.Amendments that were proposed by Minister for Jobs Enterprise and Innovation Richard Bruton were recognised by the Seanad in a meeting on 26^th April 2012, and subsequently were included in the final draft of the Legislation. Comparators Of the changes accepted by the Seanad, one of the most striking, is that the reference to a Comparator has been removed from the wording of the Bill. Previously the Bill required an Employer to provide the same “basic working and employment conditions as a comparable employee” to an Agency Worker. This opened the Bill up to intense criticism as a comparable employee may also have significant experience and as such be on a higher rate of pay than a person who was recruited directly into the role. The wording has been amended as follows

“7.—(1) Subject to any collective agreement for the time being standing approved under section 8, an agency worker shall, for the duration of his or her assignment with a hirer, be entitled to the same basic working and employment conditions as the basic working and employment conditions to which he or she would be entitled if he or she were employed by the hirer under a contract of employment to do work that is the same as, or similar to, the work that he or she is required to do during that assignment.”.

The revised wording now states that an Agency Worker will receive the same basic working an employment conditions as they would do had they been directly recruited into the role by the Hiring Company, thus potentially allowing for differences in pay between workers performing comparable work. Anti-Avoidance Measure Another notable inclusion is an Anti-Avoidance measure that has been inserted to avoid a scenario where a company offers pay increments based on length of service, and the hiring Company is avoiding these by issuing the Agency worker with rolling contracts with short breaks in between assignments. Now an employee will not return following a break back to their “day one” rates and would return with potentially their length of service intact Retrospective Nature of the Act Of all the inclusions since the first drafting perhaps one of the most controversial was the retrospective nature of the Act and how the legislation would be deemed to be in effect from 5^thDecember 2011. There were considerable arguments on this matter with parties suggesting it was unconstitutional to have this in effect from 5^thDecember 2012. The new result of this debate is that the Act now restricts the application of retrospection to pay only and not to any of the other basic working and employment conditions which come within the scope of the legislation. It would be highly unwieldy to enforce retrospection of conditions such as access to a crèche and some Seanad members mooted the possibility of compensation for employees who were not given access to these facilities which in itself is a ludicrous scenario. It is still not ideal to have retrospection on pay included in the Act; however it is a better scenario we now find ourselves in with the clarity this provides. It remains to be seen whether or not any agency will challenge the constitutionality of this retrospection anyway in view of the legal arguments that occurred prior to the 16^thof May 2012. Protection of Employees (Temporary Agency Work) Act 2012 The end result of the months of on-going negotiation and debate is that the Agency Workers Legislation is now in place with the Department due to provide an explanatory memo very shortly on its implementation. The Act provides Equal Treatment in respect of pay and basic working conditions to Agency Workers from DAY ONE of their assignment, with Equal treatment in this context extending to the following range of issues:

1. Pay, which is defined as;
   1. Basic pay
   2. Shift premium
   3. Piece rates
   4. Overtime premium
   5. Unsocial hours premium
   6. Sunday premium where a Sunday is worked and a premium is normally paid to a directly recruited employee
2. Working time
3. Rest periods
4. Rest breaks
5. Night work
6. Annual leave
7. Public holidays
   1. Access to collective facilities and amenities (e.g. canteen, childcare and transport facilities)
8. Access to information on vacancies in the Hirer Company.

The following elements of a possible remuneration packages are excluded from the definition of pay in the Act: Occupational pension schemes

1. Financial participation schemes
2. Sick pay schemes
3. Benefit in kind
4. Bonuses
5. Maternity/Adoptive Leave

The legislation will make a considerable impact on Employment Agencies and End Users of Agency Workers. As employer, the Employment Agency has primary responsibility for ensuring that equal treatment applies to the Agency Worker, and they will hold the liability in the event of a claim. However, this is dependent on the Agency being provided with sufficient up-to-date information by the Hirer/End User, so the End User will need to have measures in place to show they provided the correct information and that this information is up to date. In practice the consequences are that the Agency will have to show that it obtained or took reasonable steps to obtain relevant information from the Hirer/End User about its basic working and employment conditions and treated the Agency worker accordingly. The primary area in which issues arise is in relation to a starting wage for employees. The Employment Agency will need to be able to show that the Agency Worker is in receipt of the same basic wage they would have received had they been recruited directly by the End User and that this wage is the same as a comparable employee as defined above. There is also a statutory indemnity in the legislation protecting the Agency where violation of the Act is accredited to the failure of the Hirer/End User to provide the information, so if there is an argument to show the Hirer/End User provided fraudulent information to the Agency it will mitigate against the Agency being solely liable in the event of a claim by the Agency Worker. The Act itself has been debated widely for the past 12 months, and it will present challenges to both the Employment Agency and End Users alike, with some commentators having gone as far as to predict the downfall of the Agency Worker in Ireland. One aspect is clear and that is that the Act is now in place and that the terms of the Legislation are firmly laid out, with the ambiguity removed on matters such as what defines pay, the matter of the derogation period, and finally the retrospective nature of the Act.  Whether or not it will be the end of Agency Workers remains to be seen, however the UK experience seems to suggest there will still be a need for the role that they provide to employers. If your business employs Agency Workers or you use Agency Workers and you are unsure of your potential liability please contact the 24 Hour Advice Service on 01 855 5050 and speak to one of our advisors