Labour’s manifesto promised that the new Government  will introduce legislation on employment law within 100 days. I’m not sure if the clock is ticking yet. Did they mean 100 days from the election or 100 days from the King’s Speech on 17 July? Let’s just say the deadline is around the end of October and not worry too much about counting the days.

In this post I want to look at an area that I don’t think has been fully addressed in Labour’s key policy document on employment law – Labour’s Plan to Make Work Pay. That is the issue of agency workers. 

An agency worker is someone in a triangular employment relationship. An end user hires an agency to provide them with a worker on a temporary basis. The worker has no direct contract with the end user but does have a contract with the agency. Agency workers have specific rights under, for example,  the Working Time Regulations and the Agency Worker Regulations. They also enjoy a range of other rights including protection from discrimination and harassment and entitlement to the National Minimum Wage. In most cases, however, they are not employees and so do not have protection against unfair dismissal. They are usually engaged by the agency on the basis that they may be offered work with various clients, but there is no obligation on the agency to find them an assignment. So if an end user no longer wants them, they can find themselves with no work to do and no right to be paid anything even though they remain ‘on the books’.

With some exceptions, agency workers are not employees. The triangular nature of their work (their work is controlled by the end user, but they are paid by the agency) means that neither their relationship with the end user nor the agency is one of employer-employee. The case law has wobbled on this issue in the past but for a good few years now this has been the accepted position. Even agency workers who have been engaged on the same assignment for months or years will not gain employment status as a result, provided the arrangement with the agency is genuine and not a sham.

So what happens to agency workers under Labour’s plans? Curiously, ‘Labour’s Plan to Make Work Pay’ only mentions them once – in the context of repealing the Regulations introduced when Boris Johnson was Prime Minister that allowed them to be used to replace strikers. Since the High Court ruled that those Regulations were unlawful however, I don’t think that policy makes much sense. The Regulations have already been ‘quashed’ (very pleasing word). The last Government was consulting on having them reintroduced but clearly that will not now happen. 

But the position of agency workers will certainly be affected by the proposals that the Government is committed to making. For example, one of the first things the Government is likely to do is abolish the qualifying period for unfair dismissal (this can be done by Regulation so there is not need to wait for an Act of Parliament to make the change). That will certainly make some employers feel more nervous about recruiting untested new staff. One response employers might have is to hire someone as an agency worker first and confirm them as an employee when they are confident that they will be a good fit. If it doesn’t work out, they can end the assignment after 6 months or so and the agency worker will not be able to claim unfair dismissal. Would that work?

Well, the Government is also proposing to move to a ‘single status of worker’. So that would imply that agency workers – unless there was an exception carved out for them – would qualify for the same rights as everyone else and would be able to claim unfair dismissal after all. 

But who would they claim against? They do not have a contract with the end user – they have a contract with the agency. So it is difficult to see how the ending of an agency work assignment could count as a dismissal by the end user. Would they have been dismissed by the agency? Well the agency would presumably say they have not been dismissed at all. Their contract with the agency is still in place. – they just don’t have an assignment for them at the moment and they can stay on the books until one comes up. 

But the Government is also pledging to ban ‘exploitative zero hours contracts’ – would that include situations like this one? Workers would be entitled to a contract based on the average of their previous 12 weeks of work. Would that apply to agency workers? How could it? It’s all very tricky.

None of this is a criticism of the manifesto. The proposals that Labour made were actually very detailed and precise by the standards of political parties setting out their policies before an election. But as the Government translates its political policies into actual legislation, these issues will need to be considered and dealt with.  This is just one area among many where a lot of work will have to be done in working out the detail. Given the timetable Labour set itself, and the sheer scale of what else is being proposed, they will have to move quickly. 

Over the past 14 years we have become used to modest incremental changes in employment law being introduced at a snail’s pace. The 2019 Conservative manifesto promised to introduce carer’s leave and all that amounted to was one week of unpaid leave that was eventually introduced four years later. Frankly it’s been a dull few years as far as employment law goes. I just can’t emphasise enough that things are about to change. 

Strap in.