The rules are set out in the Agency Workers Regulation 2010 (AWR) and the relevant employment terms and conditions for this purpose are those relating to pay, duration of working time, night work, rest periods, rest breaks and annual leave.
In the case of Kocur v Angard Staffing Solutions Limited (1) and Royal Mail Group Limited (2) the EAT held that:
- a failure to provide an agency worker with the same annual leave entitlement and paid rest breaks as those enjoyed by Royal Mail's permanent employees could not be compensated for by an enhanced hourly rate of pay.
- each term must be looked at individually rather than taking all the employment conditions as a package.
- agency workers' basic working and employment conditions should be "at least those that would apply if they had been recruited directly".
Mr Kocur was an agency work supplied by Angard Staffing Solutions to work at Royal Mail.
Royal Mail's employees and agency workers had a one-hour rest break each day. Royal Mail's employees were paid for the full hour rest break, received 30.5 days' annual leave and were paid £9.60 per hour. The agency workers were only paid for 30 minutes of the one-hour rest break, received 28 days' annual leave and were paid an enhanced hourly rate of £10.50.
Mr Kocur brought a claim for multiple breaches of the AWR. The Employment Tribunal dismissed his claims, largely on the basis that his enhanced hourly pay compensated for the disadvantageous annual leave and rest break pay. Mr Kocur appealed to the EAT which upheld Mr Kocur's appeal, finding a clear disparity between the terms relating to annual leave and rest break pay between Mr Kocur and Royal Mail's permanent employees.
Practical points to note:
- Less favourable treatment in one respect cannot be offset by more favourable treatment in another. Whilst agency workers may be paid a higher rate of pay than comparable permanent employees, businesses cannot rely on this to compensate for other less favourable rights.
- Agency workers should not be deprived of annual leave to which comparable permanent employees are entitled and this cannot be compensated by an enhanced hourly rate.
- Where the length of holiday entitlement is identical between agency workers and permanent employees, it is possible for agency workers to be paid for that holiday entitlement in a different way, for example by means of a lump sum at the end of an assignment, or by means of a higher hourly rate, as long as that payment mechanism is transparent.