Agency Worker Rules: UK Employer Guide for 2025

Agency workers are a part of an organisation’s workforce who are not engaged permanently. The Agency Workers Regulations (AWR) in the UK were introduced to ensure agency workers are treated fairly and receive equal treatment to comparable permanent employees after a qualifying period. These regulations apply to individuals engaged through a temporary work agency and performing work for an end user.

Under the AWR, agency workers are entitled to the same basic employment rights and conditions as directly employed staff after 12 weeks of continuous employment in the same role. These rights include equal pay, holiday entitlement, and working conditions. From day one, agency workers also benefit from access to collective facilities, such as staff canteens or childcare, and must be informed of job vacancies within the organisation.

Employers face risks if they fail to comply with the AWR. Equal treatment breaches can lead to tribunal claims, financial penalties, and reputational harm. Determining liability can be challenging, as both the agency and the end user may bear responsibility for different aspects of non-compliance.

Key considerations for employers include ensuring accurate record-keeping to track the 12-week qualifying period, providing clear communication with agencies about pay and working conditions, and conducting regular reviews of agency worker arrangements to confirm compliance with the regulations. Awareness and proactive management can help mitigate risks and promote fair treatment.

This guidance provides an overview of the legal considerations for employers when hiring agency workers and temporary workers.

 

Agency Worker Regulations

 

Legislation covering agency workers and temporary workers is provided by the Agency Workers Regulations 2010 which came into force on 1st October 2011 and the Agency Workers (Amendment) Regulations 2019 (both referred to in this guide as the “Regulations”) which came into force on 6th April 2020.

The term ‘agency worker’ is often used in the workplace to describe several types of similar workers, although it has a specific meaning under the Agency Workers Regulations 2010. Agency workers are also often referred to as ‘temps’ within the workplace.

The Regulations apply to:

 

• Persons who work as temporary or agency workers
• Persons or organisations, including private and public organisations, charities or social enterprises who are involved in the supply of agency workers. Whether that is directly or indirectly, to work temporarily for and under the direction of a ‘hirer’.
• Sometimes referred to as the ‘Temporary Work Agency’ (TWA).
• Hirers include public and private organisations, charities and social enterprises

 

 

The Temporary Work Agency

 

These types of agencies supply workers on a temporary basis to third parties (the hirer). The worker then works under the direction and supervision of the hirer but has a contract with the TWA. The Regulations describe a TWA as an individual or company in business, whether operating for a profit or not involved in the supply of agency workers. As stated above, the Regulations include private and public companies, charities or social enterprises, and may be a ‘high street’ agency or an intermediary, such as an umbrella company, if they are involved in the supply of agency workers.

 

The Agency Worker

 

The agency worker, often referred to as the temp, is an individual who has a contract with the TWA but works temporarily for and under the supervision and direction of the hirer. This trilateral relationship between agency, agency worker, and hirer is a primary feature of the Agency Worker Regulations.

The elements required for an individual to be an agency worker are:

 

• There is a contract between the agency worker and the TWA
• The agency worker is temporarily supplied by the TWA to a hirer
• The agency worker is subject to the direction and supervision of the hirer when working on assignment
• The agency worker is not in a business on their own account

 

Agency workers are entitled to a range of statutory protections under the Working Time Regulations, National Minimum Wage, and have agency worker employment rights. The Agency Worker Regulations also provide individuals with two types of rights, the first, which they receive from the first day of any assignment, and the second, which they receive after 12 weeks.

 

Day-1 Rights

 

• To be informed of any relevant vacancies in the hirer’s company. This could amount to a general announcement in a suitable place, such as a notice board or intranet, for example.
• To not be treated less favourably than an equal worker regarding “collective facilities and amenities.” This includes staff canteens, transport services and childcare facilities. It may also include prayer rooms, car parking, common rooms, shower facilities, on-site gyms, and mother and baby rooms.

 

Access does not have to be given if the equal worker would not have access, or if they do, but the less favourable treatment could be objectively justified. Here, the hirer would have to be seeking to achieve a “genuine business objective” and the treatment of the agency worker is a “necessary and appropriate” way to achieve that objective. Costs can be taken into consideration, but it is extremely unlikely hirers will be able to rely on this justification alone.

An example of less favourable treatment that may be objectively justified could be something like granting direct hires first refusal to use a work shuttle bus because places are limited. The reasons for providing the service, such as encouraging staff retention or talent recruitment, could be justified on the basis the company is better served, giving priority to direct hires over agency workers, as they are likely to be there only temporarily. It is important to say, this is merely an example, and the hypothesis put forward is untested. This is because there is very little guidance on the circumstances when a business could objectively justify less favourable treatment.
Since April 2020, an agency worker must receive an itemised payslip, and a written statement of particulars.

Hirers are also responsible for making sure all agency workers receive their day one rights. Hirers are solely accountable for any breaches in relation to these rights.

 

Twelve-week rights

 

Following completion of the twelve-week qualifying period, an agency worker will have the right to the same basic employment and working conditions they would have received if they were employed directly by the organisation to perform the same role. The rights cover terms and conditions surrounding:

 

• Pay – this includes salary, wages, commission, holiday pay, overtime, shift allowances, car allowances, vouchers and/or stamps (if they can be exchanged for money, goods or services, and they are of a fixed value).
• The duration of working time
• Working at night
• Rest breaks and rest periods
• Annual leave entitlement
• Pregnant workers are entitled to paid time off to attend ante-natal appointments. Agency workers who have completed the qualifying period and are classed as in a “qualifying relationship” with a pregnant woman or the expected child are also entitled to unpaid time off to attend two ante-natal appointments.

 

The TWA, not the hirer, provides these terms and conditions and will be liable for any breach of the agency workers’ twelve-week rights. However, this is only to the degree it was responsible for the violation. The hirer may also be accountable, to the extent it was at fault.

It is the hirers’ responsibility to hand over the correct information to the TWA about the workers’ basic working conditions of its equal or comparable employees or update the TWA about any change in pay. If the hirer does not do this or gives the TWA incorrect data, leading to the infringement of the agency workers’ rights, liability transfers from the TWA to the hirer.

 

The Hirer

 

The hirer is a ‘person’ (this includes a company, partnership, sole trader or public body) which is engaged in ‘economic activity’ (whether for profit or not), who hires workers via the TWA. The hirer directs and supervises the agency worker while they fulfil the assignment.

The hirer must ensure that the agency worker is treated equally to that of a comparable permanent employee.

The test to establish equal treatment is: “on what terms would the agency worker have been employed had the hirer employed the individual directly?” If the TWA or hirer can show that the treatment of the agency worker is consistent with that of a comparator employee (doing broadly similar work), they will be deemed to have complied with the Regulations. It is not necessary to have an actual comparator employee.

Certain types of pay would need to be matched, for example, salary/wages, commission, overtime, holiday pay, shift allowances or car allowances, but benefits that are not classed as “sums payable” which are close in conceptual terms to “pay” are not required to be matched. This includes:

 

• Benefits in kind
• Company vehicle
• Percentage discounts
• Insured benefits
• Pension contributions
• Option or share schemes
• Redundancy pay
• Sick pay
• Family leave pay
• Notice pay

 

Any benefits given via salary sacrifice schemes also do not need to be matched. Instead, the agency worker is entitled to pre-sacrifice pay.

 

 

Complying with information requests

 

If an agency worker believes the TWA or the hirer has breached the Regulations, they have the right to make an information request. Any request must be addressed to the hirer in the case of day one rights, and to the TWA if they have not received a response. With twelve-week rights, the request should be directed to both the TWA and the hirer.

 

Employment status of agency workers

 

Rights of agency workers or temporary workers depend on the following:

 

• Whether they have employee status
• Fall within the legal definition of “worker”
• Have completed the required period of continuous employment in order to qualify for certain rights.

 

An agency worker can be a worker or an employee of the TWA, but is not likely to be either of the hirer. It is extremely rare for an agency worker to be found to be a worker or employee of the hirer, and case law suggests the same. The case of James v Greenwich LBC found that a relationship of employment will only be found to exist between a hirer and an agency worker, where it is necessary to give proper effect to the reality of the relationship.

Provided the agency worker has a contract of employment with the TWA and not the hirer, and the hirer has not incorporated the agency worker into its benefit schemes and payroll, the possibility of the hirer being found to be the agency worker’s employer is extremely low.

 

Pros and Cons of using Agency Workers

 

Organisations often rely on agency workers for several practical and strategic reasons. One primary advantage is the ability to temporarily cover workforce gaps caused by factors such as busy periods, employee illness, or annual leave. Agency workers provide a quick solution to ensure operations continue smoothly during these disruptions.

Using agency workers also offers flexibility, enabling businesses to adapt to peaks and troughs in demand or workload. This is particularly valuable in industries with seasonal work, such as retail or hospitality, where staffing needs fluctuate throughout the year. Additionally, headcount restrictions may make it challenging to hire permanent employees, and agency workers can provide an effective way to manage staffing levels without impacting headcount limits.

Another benefit is the ease of hiring and terminating agency workers. Since the employment relationship lies with the temporary work agency (TWA), organisations can adjust their workforce quickly without the need for lengthy hiring or termination processes. For some roles, hiring an agency worker may also prove more cost-effective than employing a permanent employee, as organisations avoid costs associated with employee benefits, training, and long-term commitments.

While there are clear advantages, employing agency workers comes with challenges that organisations must carefully consider. Compliance with the Agency Workers Regulations (AWR) can add administrative burdens, as organisations need to provide accurate pay information to TWAs to ensure agency workers receive the correct pay and benefits. Failing to comply with the regulations carries risks, including potential liability for breaches.

Cost can also be a disadvantage. Organisations pay a fee to the TWA that includes the worker’s wages, the agency’s markup, and other overheads. These additional costs may result in hiring an agency worker being more expensive than directly employing someone.

Managing behaviour and adherence to organisational policies can be another concern. Agency workers typically fall outside an organisation’s standard disciplinary procedures, leaving limited recourse for addressing unacceptable behaviour other than ending the assignment. This lack of direct control may lead to challenges in enforcing compliance with workplace policies.

Another drawback is the potential for reduced engagement and loyalty among agency workers. Unlike permanent employees, agency workers often lack opportunities for promotion or career progression within the organisation, which can result in less commitment and lower levels of motivation. This can impact team cohesion and overall productivity, especially in roles that require significant collaboration or long-term dedication.

Organisations using agency workers should also account for the impact on workplace culture. Temporary staff may find it harder to integrate into teams or align with company values, potentially leading to disjointed working environments. Clear communication and efforts to include agency workers in team activities can help mitigate this.

When hiring agency workers, businesses should conduct due diligence to ensure the TWA complies with legal and ethical standards. This includes verifying that workers are paid correctly and that their rights under the AWR are upheld. It is also advisable to maintain robust record-keeping practices to track hours worked, payments made, and compliance with relevant regulations.

For businesses relying heavily on agency workers, balancing flexibility with a core permanent workforce may be an effective strategy. Permanent staff can provide consistency, institutional knowledge, and long-term commitment, while agency workers offer adaptability in response to short-term needs. A thoughtful approach to workforce planning can help organisations maximise the benefits of agency workers while minimising potential drawbacks.

 

Need assistance?

 

DavidsonMorris can assist if you have any queries relating to agency worker rights and entitlements. For guidance on a specific employment issue, speak to our experts today.

 

Hiring Agency Workers FAQs

 

Who is considered an agency worker?

An agency worker is an individual supplied by a temporary work agency to work temporarily for an end-user business, under their supervision and direction.

 

What rights do agency workers have from day one?

From the first day of their assignment, agency workers are entitled to access the same collective facilities as permanent staff, such as canteens or childcare, and to be informed of job vacancies.

 

When does equal treatment apply to agency workers?

Agency workers become entitled to the same basic working and employment conditions as directly employed staff after completing 12 weeks in the same role with the same employer.

 

Who is responsible for ensuring compliance with the Agency Workers Regulations?

Both the agency and the end-user employer share responsibility. The agency typically ensures pay and holiday entitlements align with regulations, while the end user provides access to facilities and information on vacancies.

 

How is the 12-week qualifying period calculated?

The 12-week period includes only the weeks worked in the same role. Breaks such as holidays, sickness, or maternity leave may pause or extend the qualifying period.

 

Do agency workers have the right to be paid the same as permanent employees?

Yes, after completing the 12-week qualifying period, agency workers must receive equal pay to comparable permanent employees unless a specific exemption, like the Swedish derogation, applies.

 

What happens if the Agency Workers Regulations are breached?

Non-compliance can result in tribunal claims, financial penalties, and reputational damage for both the agency and the end user. Employers should maintain accurate records and ensure fairness.

 

Are agency workers entitled to holiday pay?

Yes, agency workers are entitled to holiday pay, calculated on the basis of their hours worked. Equal holiday entitlement applies after the 12-week qualifying period.

 

Can agency workers claim unfair dismissal?

While agency workers are not protected from unfair dismissal in the same way as permanent employees, they can bring claims related to breaches of the Agency Workers Regulations.

 

How can employers minimise risks with agency workers?

Clear communication with agencies, regular compliance checks, and accurate record-keeping are essential to avoid breaches of the regulations and ensure fair treatment of agency workers.

 

Glossary

 

Term	Definition
Agency Worker	An individual supplied by a temporary work agency to work temporarily for an end-user business.
Temporary Work Agency	A business or organisation that supplies agency workers to end-user companies for temporary assignments.
End User	The business or organisation where the agency worker performs their duties under supervision and direction.
Equal Treatment	The right of agency workers to receive the same basic employment conditions as permanent employees after 12 weeks.
12-Week Qualifying Period	The time an agency worker must work in the same role for the same end user to gain equal treatment rights.
Day-One Rights	Rights agency workers are entitled to from their first day, such as access to facilities and job vacancy information.
Swedish Derogation	A now-repealed exemption that allowed agencies to avoid equal pay obligations by employing workers directly.
Collective Facilities	Shared amenities provided by the end user, such as canteens, childcare facilities, and staff common areas.
Holiday Pay	Payment for leave entitlement accrued based on hours worked by the agency worker.
Tribunal Claim	A legal complaint made by an agency worker if their rights under the Agency Workers Regulations are breached.