93: Employment Appeal Tribunal rules that parity of terms for agency workers must be assessed using term-by-term approach
Under the Agency Workers’ Regulations 2010 (AWR), agency workers are entitled to the ‘same basic working and employment conditions’ as permanent employees after
12 continuous weeks (regulation 5(1)).
This only applies to terms and conditions relating to pay, duration of working time, night work, rest periods, rest breaks and annual leave (regulation 6(1)). In Kocur v Angard Staffing Solutions Ltd, the Employment Appeal Tribunal (EAT) has clarified that compliance with this provision must be assessed by looking at each term individually rather than at the worker’s overall package.
Angard Staffing Solutions supplied temporary agency workers, including Mr Kocur, to Royal Mail, where they worked alongside permanent employees. Both employees and agency workers had a daily one hour rest break, but employees were paid for the full hour whilst agency workers were only paid for 30 minutes of it. In addition, employees received 30.5 days’ annual leave, whereas agency workers received only 28 days. However, agency workers were paid an enhanced hourly rate of £10.50 per hour whilst permanent employees received £9.60.
Mr Kocur brought a claim in the Employment Tribunal alleging that under the AWR he was entitled to the same weekly working hours, annual leave and paid rest breaks as Royal Mail’s permanent employees.
The Employment Tribunal dismissed Mr Kocur’s claim, ruling that his enhanced hourly pay compensated for his less generous rest break and annual leave entitlements. His claim for parity of working hours was also rejected because this would undermine the flexibility needed by hirers when engaging agency workers to meet fluctuating demand.
On appeal, the EAT agreed with the Tribunal’s reasoning on working hours but allowed Mr Kocur’s appeal in relation to annual leave and rest breaks. The EAT held that basic working and employment conditions for agency workers must be ‘at least’ the same as those that would apply if they had been recruited directly. Failure to provide the same entitlement to annual leave and rest breaks cannot therefore be offset with a higher rate of pay. Although this means that a term-by-term approach is required, the mechanism by which parity is achieved can differ as long as the payment mechanism is transparent. For example, agency workers can receive the same holiday entitlement as permanent staff, but be paid differently, such as a higher hourly rate with a rolled-up amount for holiday pay. However, the precise allocation would have to be made clear in the worker’s payslip, which was not the case for Mr Kocur.
As well as settling the debate on whether the AWR require a term-by-term approach or whether a package approach is permissible, this case also confirms that higher rates of pay cannot be used as justification for giving agency workers less generous basic working and employment conditions. Employers are therefore advised to review and amend policies and practices accordingly.