Agency Workers Regulations: hirer liable for underpayment of agency worker’s salary

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Summary: In one of the few reported cases on the Agency Workers Regulations 2010, an employment tribunal has held that the hirer, not the agency that employed the agency worker, had to compensate the agency worker when she wasn’t paid the appropriate salary required by the Regulations.

In one of the few reported cases on the Agency Workers Regulations 2010, an employment tribunal has held that the hirer, not the agency that employed the agency worker, had to compensate the agency worker when she wasn’t paid the appropriate salary required by the Regulations.

Agency worker not paid comparable pay after 12 weeks in the role, due to hirer’s inaction

The Agency Workers Regulations 2010 (the “Regulations”) provide that after a 12 week qualifying period, an agency worker must, among other things, be paid the same as if they had been employed directly by the hirer to do the same job. If this isn’t done, to the extent that it’s their fault, the agency and the hirer can be liable to pay compensation to the agency worker.

In this case - Stevens v. Northolt High School - the agency had taken reasonable steps to obtain information from the hirer about the salary of the hirer's comparable employees after the 12 week period. The hirer had failed to give the agency the required information, despite repeated requests to do so. The hirer was therefore solely liable for the salary underpayment.

Implications for employers: the importance of systems and contractual documentation

This case is a useful reminder that both hirers and agencies should have in place systems to ensure they comply with their respective obligations under the Regulations, and contractual arrangements (including indemnities) so that any contingent liabilities such as those in this case are properly apportioned.

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