Health Business

Working rights

Janet Martin, Associate Director of HR, NHS Professionals, looks at rights for agency workers and implications for the NHS

Terms and conditions for agency and temporary workers could be about to change – and this will have a huge impact on all employers who use this valuable workforce as a way of managing their staffing requirements. This includes the NHS where, in some organisations, up to 10 per cent of the workforce may be engaged under temporary arrangements of some shape or form at any one time.

This potential change follows the issuing on 20 May 2008 of an agreed joint statement by the government, TUC and CBI pledging equal treatment for agency workers in basic working and employment conditions once they have been in a job for 12 weeks.

Subject to agreement by the European Parliament, the rights likely to be available to agency workers include:

to receive the same basic terms and conditions as comparable permanent workers, including: pay, sick pay, rest breaks and holidays
to be informed about permanent vacancies in the organisation where they are undertaking a temporary assignment.

UK implementation
Those rights are subject to EU agreement on the Agency Workers Directive, but the European Council of Ministers has now supported the UK proposal and there is a general consensus that implementation in UK law is likely in 2010.

In the Department for Business Enterprise and Regulatory Reform Press Release issued on 10 June 2008, John Hutton, Business Secretary, comments on how this will provide a fair deal for workers, without damaging Britain’s economic competitiveness.

In many settings agency workers have had poorer rates of pay and lower value terms and conditions than permanent workers whose jobs may well be the same. Typical contractual terms and conditions generally not available to agency workers include sick pay, maternity pay, paid annual leave above the statutory minimum and redundancy pay. In addition, there continues to be an absence of employment rights for agency workers, who do not have an expressed or implied contract of employment, but are engaged with an agency typically under a contract of or for services.

This absence of rights has lead to a number of Employment Tribunal cases, where agency workers have sought to establish claims of unfair dismissal if their contract for services is terminated after one year’s placement with an end user. These cases culminated in the Court of Appeal judgement in February this year in James v London Borough of Greenwich, which confirmed that there was no implied contract of employment between Ms James, an agency worker, and the Council as the end user.

At NHS Professionals we recognise that the proposed changes arising from the Agency Worker Directive are in the interests of fairness and equality, and we can see a number of benefits for flexible workers and organisations. As an organisation we are already providing a number of the comparable employment terms that are under discussion and we believe that the impact on us, as an NHS organisation, will be less than for commercial agencies and in-house banks, where arrangements may be less structured.

Unanswered questions
As widely reported in the employment law press, however, there remain many detailed questions unanswered. These include: what terms and conditions will be covered, how will a comparator be defined, and how will the 12 week qualifying period be calculated? NHS Professionals, as a Special Health Authority with the sole purpose of recruiting and placing temporary and interim workers (clinicians, executives and support workers), places around 11,000 workers every week. We therefore have a keen interest in the development of the Directive.

At NHS Professionals, we are looking at potential scenarios with regard to these issues and we will be seeking clarification on the following key issues:

Definition of an agency worker: Staff working through NHS Professionals are given a Contract of Engagement for each assignment which provides for them to be an NHS employee and not an agency worker while working a placement. Commercial agency staff are employed on a variety of different contracts including self employed or through limited companies. Many consultants set up their own limited company that contract with the agency or end user to supply the consultant. The legal status of these different types of workers will need to be analysed and considered in the context of the Directive and subsequent UK regulations.

What terms and conditions will be covered? For example, will employers be asked to pay maternity pay for a temporary worker if they meet the 12 week qualifying period? What sick pay packages will be required and, if these are deemed to be a legal requirement, will these be limited to statutory requirements, or have to be comparable to occupational sick or maternity pay schemes? This could be particularly important when the right to contribute to a pension scheme is considered. NHS Professionals’ Flexible Workers are already paid on Agenda for Change (AFC) pay scales, receive an NHS equivalent annual leave entitlement and are able to join the NHS Pension Scheme and access all its benefits. On the other hand, some commercial agencies pay flexible workers more than the equivalent rate for a comparative permanent role. Would workers on a higher rate of pay be excluded even if other terms are not comparable? This is a conundrum that could have serious implications for agencies if the market exerts pressure on pay rates as a result and will impact on their ability to recruit.

How will comparators be defined? In 2006, as part of its project to introduce Agenda for Change terms and conditions for its flexible workers, NHS Professionals implemented its Clinical Classification System. This system enables us to grade flexible workers in line with approved Agenda for Change role definitions and provides a consistent national definition. These cover nursing, care support workers and other roles and link to an AFC pay band. The clarity that this has delivered has been welcomed by the National Audit Office and could well support resolution of this issue. However, commercial agencies often have less defined job roles and it will be difficult to assess what could be classed as a comparative full time role. Also will potential claimants be allowed to see copies of the contracts of their comparators before they bring a claim in order to establish whether or not they have a claim in the first place? This could cause all kinds of issues in practice, particularly if someone wanted to be difficult.

How will the 12-week period be defined? Will this need to be a continuous period and will it cover all flexible workers or those who work more than a specified number of hours? The original directive proposals including pay between assignments in order to accommodate the different temporary workforce arrangements in Europe. Is this likely to apply?

Administrative issues
As well as the legal issues, which may be clarified in the Regulations (but are more likely to be broad brush, leaving much to be interpreted by Employment Tribunals) there will be administrative costs on tracking and managing the new provisions. Organisations will have to be careful about monitoring workers engaged for 12 weeks or more, and clear about their entitlement after this time. In practice these entitlements are likely to impact in terms of increased costs passed on by the provider body. For the NHS this could be expensive, depending upon the employment conditions covered by the new regulations. AFC terms and conditions are attractive because of the benefits they provide when compared to statutory provisions; for example maternity and sick pay. If these become accessible to agency workers, then it will impact on the attraction of engaging temporary workers.

Advantages
Workforce analysts and Human Resources professionals should be concerned if the impact of the regulations was to reduce the utilisation of the flexible workforce in the UK. Temporary working provides many advantages to employers as well as the workers themselves. For employers, it gives that flexibility at the margins of the business to flex the workforce and manage peaks in workload and fluctuations in skill demand. For the workers, it provides a route for graduates and apprentices and those new to the UK into the workforce, for so called ‘portfolio’ or career interims to work at their best, and for flexible work arrangements at all stages in people’s careers.

We have practical experience of these benefits at NHS Professionals and will seek to influence the drafting of the regulations so that the impact can be as beneficial as possible for employers and the temporary workforce.