Managing Temporary Contracts / Agency Workers
agency worker unfair dismissal-managing-temporary-contracts-agency-workers

Managing Temporary Contracts / Agency Workers

Agency worker unfair dismissal


Temporary employees are hired for limited periods and are defined as staff that are engaged on a non-permanent basis. They may be:


  • employees engaged directly for a brief period
  • self-employed workers engaged for a brief period
  • casual workers
  • agency workers supplied by an ‘employment agency’ or by an ‘employment businesses.
  • agency worker unfair dismissal


Agency workers who are supplied to an employer by an agency or employment business may be employed by the employer, or employed by the agency, or self-employed.


It is important to distinguish Temporary works that there may be different employment rights for people on these types of contracts; the rights of temporary workers depend on whether they:

  • have employee status
  • fall within the definition of ‘worker’
  • have completed any required period of continuous employment needed to qualify for the right.

The Agency Worker Regulations 2010


A regulation it is important for employers to be aware of when employing agency staff is the Agency Workers Regulations 2010. This regulation applies to temporary agency workers, their agencies and their hirers.

An agency worker is someone who:

  • is supplied by a temporary work agency to work temporarily for, and under the supervision and direction of, a hirer
  • has a contract of employment with the agency, or any other contract, requiring them to perform work or services personally for the agency.

The regulation ensures that agency workers are entitled to the same basic employment and working conditions they would have if they had been recruited directly by the company, however, they must complete a qualifying period of 12 weeks in the same job.

Note, the regulations do not make agency workers into employees.

The aim is to protect low-paid workers from exploitation.

The key provisions are:

  • On day one:
    • Entitlement to the same access to job vacancies as permanent staff. The only exception arises where an employer makes available opportunities for staff at risk of redundancy.
    • Use of collective facilities, such as staff canteens, childcare facilities and transport services.
  • After a 12-week qualifying period:
    • Equal treatment and rights for agency workers as permanent staff.

Note, if an agency worker’s role changes substantially during an assignment, they may not be entitled to the equal treatment provisions.

What happens if this regulation is breached and Agency worker unfair dismissal?


A breach of the regulations could lead to an agency worker claiming less favourable treatment and/or detrimental treatment, with a potentially unlimited compensation order.

Tribunals can also make an additional award of £5,000 against any employer attempting to work their way around the regulations and find ‘loopholes’ in the regulations.

For example, putting in provision that mean the agency worker will not be able to build the 12 weeks necessary to qualify for certain protection and rights.

The hirer will be liable if it does not give the agency worker ‘day one’ rights, such as the use of canteens and mother and baby rooms, but both the hirer and agency could be held liable for breaches of pay and conditions rights after 12 weeks.

Recent changes


A number of changes affecting agency workers came into force on the 6th of April 2020:

  • The calculation of a week’s pay for holiday pay purposes to use a reference period of 52 weeks rather than the current 12 weeks.
  • Employers must provide employees with their written statement of terms and conditions on the first day of work (rather than within two months) and this right were also extended to include workers.
  • Agency workers have the right to be provided with a Key Facts Page, to include information on the type of contract they will work under, their rate of pay, which business is responsible for paying it, and any deductions or fees that will be taken.
  • The ‘Swedish derogation’ was abolished. This allowed workers with a contract that provided for a minimum level of pay between assignments to be excluded from the right to comparable pay with permanent employees.


Employer Duties


There are a number of duties that an employer needs to fulfil when hiring agency workers:

  • paying the agency, including the employee’s National Insurance contributions and Statutory Sick Pay
  • after 12 weeks’ continuous employment in the same role, ensure agency workers are getting the same terms and conditions as permanent employees, including pay, working time, rest periods, night work, breaks and annual leave
  • provide the agency with information about the relevant terms and conditions in your business so that they can ensure the worker gets equal treatment after 12 weeks in the same job
  • allow agency workers to use any shared facilities and give them information about job vacancies from the first day they work there
  • responsibility for their health and safety
  • identify what an equivalent permanent employee would be paid. This information is then given to the agency, which will then set the level of the worker’s pay.


Key Facts Document


As of April 2020, agency workers will need to be provided with a “key facts” document. This should include:

  • the type of contract they are employed under
  • the expected minimum rate of pay and how they will be paid
  • whether fees will be deducted if paid through an intermediary
  • an estimate setting out their take-home pay.

Fixed-term contracts


A fixed-term contract is also a type of temporary employment. Employees on these contracts of employment will have a specific end date or on the end date will be based on the completion of a specific project.

Fixed-term staff must receive:

  • the same pay and conditions as permanent staff
  • the same or equivalent benefits package
  • protection against unfair redundancy or unfair dismissal (subject to length of service requirements)
  • information about permanent job vacancies within the organisation.

Employers are not required to provide any notice when the contract comes to an end.

When does a temporary worker become permanent?


An employee on successive fixed-term contracts for four years or more may automatically become a permanent employee.

After four years, you must demonstrate a good business reason not to consider the individual a permanent employee.

Employers are not obliged to offer an agency worker a permanent role at the organisation.

How Wurkplace can help

Wurkplace have a team of extremely qualified and experienced Human Resources consultants who can advise on every point of the recruitment process. We also have an array of template documents created so that you don’t have to!

If you need support or guidance, talk to one of our experts today.

You can use our easy online contact form, or give us a call on: 0330 400 5490.

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