Supporting business growth: Alternative labour arrangements

What do employers need to know in order to protect their workers’ rights as well as protect themselves against potential claims?

Agency workers

Although agency workers can often be provided by employment agencies on demand, and engagements promptly ended when they are no longer required, the Agency Workers Regulations 2010 introduced significant rights and safeguards. Among other things, the Regulations provide that:

• Hirers must ensure that agency workers enjoy no less favourable treatment than a comparable directly employed employee or worker in relation to access to collective facilities and amenities
• Hirers must inform agency workers of any relevant vacancies during an assignment so that they may be given the same opportunity as a comparable worker to find permanent employment with the hirer
• Temporary work agencies and hirers must ensure that an agency worker who has completed a 12-week qualifying period receives the same basic working and employment conditions (pay, working time and annual leave) as he or she would be entitled to for doing the same job had he or she been recruited directly by the hirer at the time the qualifying period commenced. (This is subject to what is known as the ‘Swedish Derogation’ whereby, provided certain other conditions are met, an agency worker is not entitled to the same pay as a permanent employee).

The Regulations contain comprehensive anti-avoidance provisions to prevent unscrupulous employers seeking to avoid the impact of the Regulations.

An agency worker has certain protections vis a vis the employment agency too. For example, an employment agency must clearly set out certain specific terms of its agreement with a worker as required by the Conduct of Employment Agencies and Employment Business Regulations 1973.

Fixed-term contracts

Fixed-term employees are those employed under contracts which will expire on a specific date, on the completion of a specific task or upon the occurrence of a specific event. Many employers fail to recognise that the non-renewal of a fixed-term contract is a dismissal in law. This means, among other things, that unfair dismissal rights can crystallise upon the non-renewal of a fixed-term contract.

Fixed-term employees also have the protection of the Fixed Term Employees Regulations 2002. Among other things these Regulations provide that:

• Fixed-term employees must not be treated less favourably than comparable permanent employees doing the same or broadly similar work unless the difference in treatment can be objectively justified. This relates to: Contractual terms taken as a whole (which includes pay and pensions among other things); By being subjected to a detriment; Any period of service qualification; The opportunity to secure a permanent position – a fixed-term employee has the right to be informed of vacancies
• In addition, a fixed-term employee can claim compensation where he or she has been dismissed or subjected to a detriment for having done certain things or made certain requests under the Regulations. A fixed-term employee will also have automatic unfair dismissal rights if he or she is made redundant for having done those things.

The use of successive fixed term-contracts is limited. In certain circumstances, the fixed-term employee will be legally regarded as a permanent employee.

Part-time workers

Although part-time working basically involves working fewer hours than full time colleagues, it can include short days or weeks, job sharing, term-time working, evening or weekend work, and casual and supply work.

The Part Time Workers Regulations are the primary means of tackling discrimination against part-time workers. Among other things the Regulations provide that as regards their terms of employment, part-time workers must not be treated less favourably, on a pro rata basis, than the employer treats comparable full-time workers unless the treatment is justified on objective grounds.

Workers who are dismissed or subjected to detriment for enforcing, or seeking to enforce, their rights under the Regulations will be entitled to claim compensation in the Employment Tribunal.

Recently decided cases show that individuals who are remunerated on a daily basis can have the protection of the Regulations.

Consultancy

Many employers engage self-employed consultants. However, the law as to whether an individual is truly self-employed or whether he or she is an employee is complex and often uncertain. The outcome is important since not only does an employee have significant employment rights, it can be determinative of the proper the tax treatment of payments.

Even so-called self-employed contractors might be workers as defined in law and have certain rights, for example, paid holiday.

Zero Hours Contracts

Zero hours contracts are those under which an employee must be ready and willing to work but with no obligation upon the employer to offer work. In essence, the employees are on standby.

There has been much political debate about the use of such contractual arrangements which might be exploitative of the employee’s weaker bargaining position. Regulations were therefore brought into force in 2015 which makes any clause unenforceable which prohibits the worker from working elsewhere for others. In other words, it is no longer possible to expect such workers to simply be on call.

All of the preceding arrangements involve fairly complex and inter-related legal issues with plenty of traps for the unwary. Some such workers will have additional rights, for example, rights under the Working Time Regulations 1998 and the right not to be discriminated against.

It is essential that employers have in place compliant documentation and understand their obligations and the risks which can arise in any given situation.

This content is correct at time of publication