A failure to provide an agency worker with the same annual leave entitlement and rest breaks as that enjoyed by the hirer’s permanent employees could not be compensated for by giving the worker an enhanced hourly rate of pay.
Angard Staffing Solutions (an employment agency) supplied the claimant to Royal Mail where he worked alongside Royal Mail’s permanent employees. The claimant had worked at Royal Mail for over 12 weeks, triggering his rights to the same basic working and employment conditions as if he had been recruited by Royal Mail (Regulation 5 of the Agency Workers Regulations 2010).
The claimant was only given 28 days’ holiday compared to the 30.5 given to Royal Mail’s permanent employees. He was also only given half-hour rest breaks compared to the one-hour rest breaks given to permanent employees.
The claimant did however receive a rate of pay of £10.50 per hour compared to the £9.50 paid to permanent employees. The agency argued that this enhanced hourly rate adequately compensated the claimant for the more limited annual leave and rest break entitlement. The EAT disagreed.
The EAT held that it was not lawful to pay a higher hourly rate to offset the claimant’s lower holiday entitlement and lower entitlement to rest breaks.
Digging into the detail
The entitlement that agency workers have to “the same basic working and employment conditions” as permanent staff has previously thrown up questions about whether this requires a term-by-term approach or whether a “package approach” is allowed. The EAT has now ruled that you must look at it on a term-by-term approach which mirrors the position in discrimination and equal pay cases where it is long been understood that you cannot simply offset less favourable treatment in one area by more favourable treatment elsewhere. The EAT did however indicate that provided the payment mechanisms are transparent, it may be possible to compensate for reduced annual leave (for example) by paying a lump sum or an increased hourly rate provided the worker can see precisely what aspect of his remuneration relates to annual leave.
Why is it important?
If you are an organisation that deals with agency workers and you take a global or package approach to terms and conditions for these workers then we suggest that you will need to review your payment practices to ensure they do not fall foul of the equal treatment provisions in the regulations following this decision.
Kocur v Angard Staffing Solutions Ltd UKEAT/0181/17