pay between assignments agency

Agency workers: pay between assignments

As an agency worker you are entitled to certain additional employment rights. Your agency may offer you a permanent contract and pay you between assignments, but this will mean you will not be entitled to equal treatment on pay.

Being paid between assignments

Your temporary work agency may offer you a permanent contract of employment before the first assignment under the contract  and pay you between assignments when there is no work (pay must be at least 50 per cent of the pay you receive while on assignment and at least the National Minimum Wage). This provision is sometimes called Swedish derogation.

This will mean, however, that you will not be entitled to equal treatment on pay (including holiday pay) after 12 weeks in the same job. All other entitlements will apply in the same way as for other agency workers.

You cannot be forced to sign this type of contract and it may not suit everyone.

If your agency offers you a permanent contract it must set out in writing:

• minimum pay rates and how they are calculated
• the location of work reflecting where you are willing to travel
• minimum and maximum expected hours of work
• this must be at least one hour a week
• the nature of the work
• a statement that makes it clear that you are giving up the right to equal treatment with regard to pay

When you're not working you must receive pay between assignments.This must be:

• at least 50 per cent of the rate of pay from your previous assignment calculated at the highest rate of pay received during any one week
• at least the National Minimum Wage

You need to check that the terms of the contract meet your needs before signing it.

The agency can't ask you to come into the agency for an hour to avoid paying you between assignments. You'll need to be on a genuine assignment with a hirer on the basis of the terms in your contract.

While the contract is in place you will be entitled to pay between assignments until the agency finds you another job.

The pay between assignments doesn't apply to periods between two short assignments which fall in the same week, for example, if you work on Monday and do not work again until Friday. You will only be paid during the weeks where you have no work at all but are available to work.

If you're not on an assignment and the agency refuses to pay you, you could make a claim to an Industrial Tribunal.

Ending a pay between assignments contract

If the agency wants to end the contract it must first give you four weeks' pay between assignments. The four weeks' pay (which is the minimum) could either be at the end of a single assignment or between a series of assignments.

At the end of the contract, if you have already received the four weeks' pay, you will not get the payment again. The contract can end earlier for other reasons if, for example, you resign.

If the agency terminates your contract, you might be entitled to certain rights as you have a contract of employment. These may depend on the length of your service but could include:

• redundancy pay

Getting equal treatment

Agencies and hirers shouldn't structure arrangements in a way that stops you getting the protection provided by pay between assignments contracts. If they do, they could be legally challenged.

If  the agency offers you different hours from the expected hours of work included in your contract you can challenge this.

Where to get help

The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues.

If you are a member of a trade union you can get help, advice and support from them.

• Introduction to trade unions

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• Labour market reform

Analysis of the use of Pay Between Assignment contracts for agency workers

This study aimed to understand why individuals choose to sign up to Pay Between Assignment contracts.

Qualitative analysis of the use of Pay Between Assignment contracts for agency workers including the role of umbrella organisations

PDF , 1.82 MB , 56 pages

This file may not be suitable for users of assistive technology.

The purpose of this exploratory study was to understand reasons why individuals choose to sign up to Pay Between Assignment contracts, and to obtain more information on the role of umbrella organisations in the use of these contracts. The report focuses on:

• the sectors and occupations they are used in
• who requests these contracts
• why they are used
• the strengths and weaknesses of the contracts

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Making pay between assignments work

The ‘pay between assignments’ section of the Agency Workers Regulations is controversial. Employment adviser Rehan Pasha has the lowdown.

The ‘pay between assignments’ section of the Agency Workers Regulations is controversial. Employment adviser Rehan Pasha has the lowdown.

The ‘pay between assignments’ section of the new Agency Workers Regulations has been controversial. Rehan Pasha, employment adviser at law firm Squire Sanders considers the pros and cons of taking on temporary workers as PBA staff from a recruitment agency and the potential pitfalls to avoid.

The Agency Workers Regulations 2010 came into force on 1 October 2011, with the main aim of equalising agency workers’ pay with that of their employed counterparts after a 12-week qualifying period. However, the regulations also set out an alternative approach, namely the ‘Pay Between Assignments’ model (PBA). In a PBA contract, agency workers give up the potential for pay equality in return for a guarantee that they will be paid for a minimum of four weeks when they’re not working. They become employees of the recruitment agency that places them (and thereby obtaining the legal protections that only an employee can enjoy).

Several newspapers, trade unions and employee representative groups have questioned whether this PBA model is entirely lawful or if it is a loophole that will be closed off once the first cases have been decided at an employment tribunal. Many recruitment agencies, and their clients, are placing their workers on PBA contracts and this situation has led to further confusion about the legislation.

The first point to make clear is that the PBA model is a lawful process. Not only is it expressly set out as an option in the regulations themselves, but also in the European directive upon which the regulations are based. So it seems unlikely, although theoretically possible, that the government will fundamentally revise the Agency Workers Regulations to make the PBA model unlawful.

Although the issues regarding pay for the worker entering into these PBA contracts has been discussed at length in the media, the advantages for such a worker have been somewhat overlooked.

If an individual is ‘temping’ there is no obligation upon the recruitment agency to find that temp any work. The situation is quite different under a PBA contract, as the recruitment agency is then under a positive obligation to be continually looking for and offering the PBA employee additional work. Not only that but the recruitment agency is required to offer work of a type and at a rate of pay and location previously agreed with the PBA employee.

That in turn leads us onto the most significant single benefit – the right to be paid for at least four weeks, even if the worker is not carrying out any work, before the recruitment agency is able to lawfully terminate a PBA contract. The sum that the agency worker is paid is 50 per cent of the maximum salary he received over the previous 12 weeks. This provision makes it more costly for a recruitment agency to dismiss a PBA employee compared to a standard employee if both have only been employed for a brief period of time. It is also a benefit that non-PBA workers are not entitled to.

Although the recruitment agency will potentially be paying its PBA employees a lesser hourly rate than they would if they were temps, there are some significant limitations in taking the PBA route.

Under a PBA contract, the individual becomes an employee of the recruitment agency and obtains significant employment law protection rights that he would not have as an agency worker.

The most important of these rights include those not to be unfairly dismissed and to obtain a redundancy payment. In addition PBA employees will be able to bring grievances against their recruitment agency employer and will most likely need to be taken through a formal process when they are being disciplined or dismissed, both of which can take significant time to manage and can result in employment tribunal claims.

The recruitment agency will need to provide employer’s liability insurance for all PBA employees, in addition to ensuring that they have access to a pension. The time and effort involved in actively seeking further work for the PBA employees and ensuring that they are appropriately managed should not be underestimated and these costs have to be absorbed and borne by the employer recruitment agency.

Ensuring that taking on agency workers is still cost-effective for businesses whilst increasing the legal protection and pay that agency workers receive can be a difficult circle to square. Although it seems fair to say that PBA employees may receive a lower rate of pay than those agency workers who have worked for an end user for more than 12 weeks and benefit from pay equality under the AWR, this focus entirely disregards the other advantages workers gain as a result of entering into a PBA contract.

For many individuals in the current economic climate, having the promise of regular, sustained and protected employment may be preferable to a short-term higher rate of pay but with uncertainty around any longer-term engagement.    

Todd was Editor of GrowthBusiness.co.uk between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital. Connect with... More by Todd Cardy

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The end of the Swedish Derogation – yes, but what does it all mean in practice? (UK)

One of the changes planned as part of the Government’s Good Work Plan is for the “Swedish derogation” within the Agency Worker Regulations 2010 to be abolished from April next year.   This is causing concern to a number of our clients who use a high volume of blue collar agency workers.    They are estimating that the cost of this change will run into millions.

What is the Swedish derogation?

• The Swedish derogation is shorthand for a special type of employment contract provided for in Regulation 10 of the AWR.  Its official name is a “pay between assignments” contract because workers engaged on these contracts with a temporary worker agency (TWA) give up the right to pay parity with comparable permanent staff in return for a guarantee to receive a certain amount of pay when they have gaps between assignments.
• This arrangement has been most commonly used where large numbers of blue collar workers are needed e.g. retail, manufacturing, etc.  According to the Government’s figures, 8-10% of UK agency workers are on Swedish derogation contracts, which means as many as 130,000 people.

Why is it being abolished?

• The Taylor Review recommended that the derogation be repealed.   The underlying agenda for this is to encourage more employers to take on permanent employees, so providing some greater level of certainty and security to those individuals. It is absolutely not related in any way at all, no really, to the resulting increase in PAYE tax receipts for HM Treasury. The very idea.
• The Agency Workers (Amendment) Regulations 2019 will come into force on 6 April 2020 and will remove the Swedish derogation provisions set out in Regulations 10 and 11 of the AWR from that date.

What does the removal of the Swedish derogation mean?

• Abolition of the derogation means that all agency workers will be entitled to pay parity (see below).
• By no later than 30 April 2020 TWAs must provide workers whose existing contracts contain a Swedish derogation provision with a written statement telling them that with effect from 6 April 2020, those provisions no longer apply. Agency workers can bring a claim in the Employment Tribunal where their TWA fails to provide that statement on time.
• Workers asserting rights under the new Regulations will be protected from detriment and unfair dismissal.

What is pay parity?

• An agency worker is entitled to the same basic working and employment conditions as direct recruits of the same business (including pay) once he/she has undertaken the same role with the same hirer for 12 continuous calendar weeks.
• “Pay” includes any sum payable in connection with the agency worker’s employment, including certain bonus payments, holiday pay, overtime, shift allowances and unsociable hours premiums, but excludes company sick pay, maternity/paternity pay, adoption pay, pension contributions and redundancy pay.
• It does not include bonuses which are not directly attributable to the amount or quality of the work done by a worker, and which are given to a worker for a reason other than his/her personal output, such as to encourage the worker’s loyalty or to reward the worker’s long-term service.

Why are clients worried?

• If the client hires agency workers who are currently employed under Swedish derogation contracts, then these changes could have significant financial implications after the 12-week qualifying period because it will then have to pay the agency worker the same rate as direct recruits.
• TWAs will also be concerned with the change, as many recruitment businesses supply on Swedish derogation contracts of employment because they have been required to supply on this basis by hirers. This mean they will have to re-visit client terms and pay rates, which will cause an administrative burden.
• How much this impacts on each client will depend on how many agency workers they hire on Swedish derogation contracts, how long for and in what kind of roles. In particular, of course, the cost will depend on how great is the gap between what the client currently pays for those staff and what it will need to pay when they are entitled to the same rates as its comparable permanent staff.

How can we help?

• We are recruitment sector specialists, acting for clients over the full length of the recruitment supply chain. We understand how the sector works as well as the language and practices used.
• We were heavily involved in the Government’s consultation on the AWR when they were first implemented, working closely with both the CBI and REC. We therefore have an in-depth knowledge of the AWR.
• We are continually and actively advising clients in relation to this area.  This includes providing training to ensure that HR, legal and operational teams understand the implications of the change.   We are also advising end-user clients on potential options in relation to reducing the financial impact of this change.

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Agency workers

Introduction, who is an agency worker, who is considered my employer, entitlement to equal treatment, other laws that protect agency workers, if you think you have been victimised as an agency worker, making a complaint, more information.

An agency worker (or temporary agency worker ) is a person who has an agreement with an agency to work for another person.

For example, a secretary may have an agreement with an employment agency to do work for an office while one of their employees is on leave.

While agency workers do not have all the same employment rights as regular workers, agency workers have the right to equal treatment in basic working and employment conditions. This is set out in the EU Directive on Temporary Agency Work (see ‘Legislation covering equal treatment’ below).

You are an agency worker if you are employed by an employment agency and are temporarily assigned to work for another organisation (the hirer).

Who is not an agency worker?

The following workers are not considered agency workers:

• People working as independent contractors or who own their own business, who are placed by an employment agency. In this case the contractor is a client or customer of the hirer.
• Some workers employed under a managed service contract. This is a contract for services (for example cleaning), where the contractor is responsible for managing and delivering the service.
• Workers who are on the Work Place Experience Programme, Community Employment, TÚS or any Department of Social Protection vocational training or re-training scheme.

You can get more information about understanding your employment status .

This depends on which employment rights you are seeking to enforce.

For the purposes of most employment legislation (exceptions below), the party who pays your wages will, normally, be considered to be your employer. This is either the employment agency or the client company.

The Social Welfare (Miscellaneous Provisions) Act 2003 clarifies the social insurance position of agency workers. It confirms that agency workers are insurably employed and the person who pays the wages is the employer for PRSI purposes.

Under the unfair dismissals legislation, your employer is the person for whom you actually work rather than the agency.

Compliance with health and safety requirements is also the responsibility of the person or organisation for whom you actually work rather than the agency.

Agency workers must have equal treatment with regular workers from their first day at work.

As an agency worker, you have the same basic employment conditions as if you had been directly recruited by the hirer. These basic employment and working conditions are:

Working time

This includes the duration of working time, rest periods, breaks, night work, annual leave and public holidays.

This is defined as basic pay, shift premium, piece work, overtime, unsocial hours worked, and Sunday work.

The legislation does not include occupational pension schemes, sick pay, bonuses, maternity pay or benefit in kind.

If you have a permanent contract with the agency and are paid between assignments, you will not be entitled to equal treatment on pay.

Access to facilities

You must have equal access to facilities such as childcare, canteen and car parking. You must also be told about permanent employment opportunities.

Legislation covering equal treatment

The rules on equal treatment are set out in the Protection of Employees (Temporary Agency Work) Act 2012 .

The Workplace Relations Commission has guidance on the Protection of Employees (Temporary Agency Work) Act 2012 (pdf) .

Part-time agency workers

If you are a part-time agency worker, you can only compare yourself to a comparable full-time employee who is also an agency worker. These rules are set out in the Protection of Employees (Part-Time Work) Act 2001 .

As an agency worker, you also have certain rights under the following employment legislation:

• Unfair Dismissals Acts 1977–2007
• Redundancy Payments Acts 1967–2014
• Minimum Notice and Terms of Employment Acts 1973–2005
• Organisation of Working Time Act 1997
• Payment of Wages Act 1991
• Maternity Protection Acts 1994 and 2004
• Employment Equality Acts 1998–2015

It is important that you know who is responsible for ensuring compliance with employment protection legislation - the agency or the firm you work for (the hirer). See ‘Who is considered my employer?’ above.

Legislation that does not apply to agency workers

The Protection of Employees (Fixed-Term Work) Act 2003 applies to most employees on fixed-term contracts. It does not apply to agency workers placed by a temporary work agency to work in another organisation. However, the Act does apply to agency workers employed directly by an employment agency.

Agency workers are protected against being victimised for reporting breaches of the Protection of Employees (Temporary Agency Work) Act 2012.

This means that the hirer or the agency cannot penalise you by dismissal, unfair treatment or an unfavourable change in your conditions of employment.

You can make a complaint to the Workplace Relations Commission about a breach of your rights as an agency worker. You should use the online complaint form .

You must make the complaint within 6 months of the dispute taking place. The time limit may be extended for a further 6 months, if there is a reasonable cause which prevented you from bringing the complaint within the normal time limit.

You can find out more about the rights of agency workers from Workplace Relations Commission's Information and Customer Service - see address below.

Regulation of employment agencies

Employment agencies in Ireland are regulated by the Employment Agency Act 1971 . Under the Act, an employment agency must have a licence to operate its business. Details of the application procedure and a list of licensed employment agencies (pdf) are available on the website of the Workplace Relations Commission.

Workplace Relations Commission - Information and Customer Service

O'Brien Road Carlow R93 E920

If you have a question about this topic you can contact the Citizens Information Phone Service on 0818 07 4000 (Monday to Friday, 9am to 8pm).

You can also contact your local Citizens Information Centre .

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Working through an agency

• Your employment rights as an agency worker
• If there's a problem with the agency

If you're an agency worker, your contract is with the employment agency. They place you with a company ('hiring organisation') for a temporary period of work ('assignment').

When you're on an assignment, the hiring organisation is responsible for directing your work.

An employment agency can also be called:

• a recruitment agency
• a temporary work agency
• a staffing company
• an employment business

Find advice on GOV.UK if you work through:

• an entertainment agency
• a modelling agency

What an employment agency must do

When you register with an agency.

As soon as you apply to work with an employment agency, by law they must give you a 'key information document' with basic details on the:

• type of contract you'll have
• pay you'll receive

When you sign a contract with the agency, by law they must give you a 'written statement' setting out the terms under which you'll work.

Find out more about:

• written statements
• key information documents on GOV.UK

When you get work through the agency

Before offering you an assignment, the agency must:

• make sure you're suitable for the position, for example you have the relevant experience, training or qualifications
• check you have the right to work in the UK
• ask you to do a criminal record check and provide a DBS certificate, for certain jobs

Find out about DBS checks on GOV.UK

When the agency offers you an assignment, at the same time they must give you details including:

• the name of the hiring organisation and the nature of its business
• your start date and how long the assignment is likely to be for
• details of the position and type of work
• the location
• your working hours
• any risks to health and safety and how the hiring organisation will protect you from these
• what experience and training you need
• the rate of pay and any other benefits offered by the hiring organisation
• whether you can claim any expenses

By law, these details must be given to you in writing or by email straight away when they offer you the assignment, or within 3 working days if they told you verbally to start with.

Agency fees and charges

An employment agency must not charge you a fee to register with them or to find you assignments.

This is except for entertainment agencies, who can charge you for finding you work.

Employment agencies might offer other services for a fee, such as:

• help with your CV
• training courses
• accommodation

If the agency does charge a fee for these other services, they must not:

• pressure you
• treat you unfairly if you do not agree to pay for any
• say they'll only find you work if you agree to pay for these services

If they do charge you, you should be able to cancel and get your money back, if you give the following notice:

• 10 working days for living accommodation
• 5 working days for all other services

If you think you've been charged a fee unfairly, you can report the agency to the Employment Agency Standards Inspectorate (EAS) on GOV.UK .

Umbrella companies

Your employment agency might use an 'umbrella company' for processing your timesheets and pay.

If you're self-employed and do not have a limited company, you might use an umbrella company to process your pay when you get an assignment through an agency.

The umbrella company:

• acts as your employer and the employment agency is their 'client'
• sends an invoice to the employment agency for your pay
• uses the PAYE system to make relevant deductions and pay you the rate you agreed with the employment agency
• charges a fee for their service to you or the employment agency – whoever made the arrangement with them

If you have this arrangement, you would usually be classed as an employee of the umbrella company.

If you like, you can tell us more about what was useful on this page. Please do not include any personal details, for example email address or phone number. If you have a question about your individual circumstances, call our helpline on 0300 123 1100. We cannot respond to questions sent through this form.