Back pay awarded to agency workers paid less than employees

Sandwell Metropolitan Borough Council in the West Midlands will award forty agency waste collector workers thousands of pounds in backpay. The workers argued that their pay should have been equal to employees.

The workers, while being employed by Templink, were working for Serco on the outsourced refuse collection. They claimed that their salaries were paid at a lower rate than permanent employees. Templink is a council owned employment agency.

Agency workers, under Agency Worker Regulations 2010, must be treated the same as permanent staff members after they have completed a qualifying period of 12 weeks in any particular position.

Several of the workers who were placed on the Sandwell refuse work project had been contracted for two years.

Earlier in 2020 the Swedish derogation was ruled unlawful. The Swedish derogation was a contract of employment where a worker is hired directly by an agency, instead of going through a middleman.

Because it avoided some of the Agency Workers Regulations (AWR) 2010, it was a controversial model with several loopholes.

One loophole meant that employers could pay agency workers less than they paid permanent staff members.

The workers at Sandwell will each receive back pay between £2,000 and £7,000. Additionally, they will receive a pay increase with drivers earning an extra £2.29 per hour and loaders earning an extra £1.70 per hour.

A spokesperson for Unite Union, representing the workers, commented that although the employment tribunal claims had been started, they had been effectively settled by the agreement.

Simon O’Keefe, regional officer with Unite said that this was an ‘excellent victory for the group of agency workers.’ Agency workers carry out the same duties as permanent staff members and it is right that they receive the same pay rates.

The victory for the workers shows what can happen when people are organised, namely that a level playing field and a fair pay package can be achieved.

The case for underpayment was started and led by Deb Melia, a refuse driver who had been hounding the council for compensation since May 2020.

What is an agency worker?

This is a person who has a contract with a recruitment company. The individual is sent to work temporarily for a hiring company. They are also called ‘temps.’

This means that there are obligations on both the agency and the hiring company.

A self-employed person is not an agency worker because they own and run the business they are operating.

What are the legal rights of agency workers?

The Agency Workers Regulations 2010 (AWR) gives important rights for agency workers regarding basic employment and working conditions, from the day they commence until the end of a 12-week qualifying period.

Day one

On the first day of the assignment, the worker must have access to all permanent staff amenities and facilities. This includes childcare centres, car parking facilities and canteen areas.

Every agency worker has the right to be informed about of any job vacancies which suit them at the hiring company so that they have the chance to find permanent work placements.

Providing these rights on day one falls to the hiring company and not with the agency.

Week 12

After completing 12 weeks the worker is entitled to the same basic conditions to workers who are employed directly by the hiring company.

These rights only apply if the worker has done the same job (even if it is in more than one assignment) with the same hiring company for 12 consecutive weeks.

Terms and conditions which agency workers are entitled to after 12 weeks include:

  • Basic pay, holiday pay, overtime, commission, and performance related bonuses
  • Length of working day
  • Night shifts
  • Rest breaks
  • Rest periods
  • Annual leave

Other conditions which are covered by the AWR 2020 are pension auto enrolment, statutory sick pay, and parental rights.


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