The Employment Appeal Tribunal has recently issued a judgement in relation to agency workers and the Agency Workers Regulations 2010 (AWR 2010). In Kocur v Angard Staffing Solutions Ltd UKEAT/0181/17, it was held that failure by an “end user” to provide agency workers with the same annual leave entitlement and paid rest breaks as their permanent employees, could not be rectified or compensated for by providing the agency worker with a higher rate of hourly pay.
Background and the Law
Under Regulation 5(1) of the AWR 2010, agency workers are entitled to the “same basic working and employment conditions” as they would be entitled to if they had been directly employed by the end user, rather than through an agency. By virtue of Regulation 7(2), to be entitled to these conditions, the agency worker has to be carrying out the same role with the hirer for 12 continuous calendar weeks. Regulation 6(1) provides that it is only “relevant terms and conditions” that are taken into consideration, including:
- Pay;
- Duration of working time;
- Night work;
- Rest periods;
- Rest breaks;
- Annual leave.
Facts of Kocur Case
Angard Staffing Solutions was an employment agency which supplied temporary agency workers to Royal Mail. Those agency workers, including Mr Kocur, worked alongside permanent employees of Royal Mail. As Mr Kocur had worked at Royal Mail for over 12 weeks this triggered his right to the same working and employment conditions as he would have been entitled to had he been employed directly by Royal Mail.
During the working day, employees and agency workers had a rest break of one hour. Employees were paid for the full hour break but agency workers were only paid for 30 minutes of their break. Furthermore, employees were entitled to 30.5 days’ annual leave whereas agency workers only received 28 days. However, agency workers received a higher rate of hourly pay at £10.50 per hour in comparison to Royal Mail employees who were paid £9.60 per hour. Mr Kocur claimed that he should have the right to the same annual leave and paid rest breaks as the employees of Royal Mail. This claim was dismissed by the tribunal with the reasoning that less favourable entitlements to rest breaks and annual leave were compensated for by the enhanced hourly pay.
In the tribunal’s reasoning, it set out that over the period of the eight hour working day, the agency workers still received the amount of rest break as the permanent employees and also received a slightly higher wage. They also noted that in relation to annual leave, that it was within the agency workers discretion to take an additional 2.5 days of unpaid absence by stating that they were not available to work on certain days and still receive slightly more holiday pay overall than an employee who could take 30.5 days holiday.
EAT Decision
Mr Kocur appealed the decision of the Employment Tribunal. The Employment Appeal Tribunal allowed the appeal in relation to annual leave and rest breaks.
The EAT made clear that in considering an agency worker’s rights under AWR 2010, each term needs to be considered of itself. If an agency worker receives, e.g. less annual leave entitlement, a claim cannot be defeated on the basis that the terms and conditions offered to the agency worker as a whole are more beneficial. More generous terms elsewhere in the contract (e.g. higher hourly pay) would be irrelevant if the right to e.g. annual leave is less generous.
In relation to the working of Regulation 5 of the AWR 2010, a literal interpretation of the phrase “the same” could result in an agency worker being prevented from earning more than direct employees. Therefore, the correct interpretation was to construe Regulation 5(1) having regard to the Temporary Agency Workers Directive (2008/104/EC). As provided by Article 5 of the Directive, the basic working and employment conditions of agency workers should be “at least those that would apply if they had been recruited directly”. Consequently, Regulation 5(1)’s reference to the “same” meant “at least”. Such an interpretation provided a minimum level of entitlement but did not impose a barrier on higher or better entitlements for agency workers.
Comment
Given that agency workers can be susceptible to a greater level of job insecurity than direct employees, it is often the case that they are paid a higher rate than comparable employees in order to compensate for this. However, a higher rate of pay cannot be used to compensate for less favourable rights to paid time off, unless it is clear as to exactly what parts of overall pay are attributable to that time off.
If you would like further information on the rights and entitlements of agency workers or any other employment advice, then please get in touch.
