INFORMATION NOTE ON THE PROTECTION OF EMPLOYEES (TEMPORARY AGENCY WORK) ACT 2012 PART 1 INTRODUCTION AND OVERVIEW PAGE 3

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1 INFORMATION NOTE ON THE PROTECTION OF EMPLOYEES (TEMPORARY AGENCY WORK) ACT 2012 PART 1 INTRODUCTION AND OVERVIEW PAGE Introduction Page Overview of the Act Page No qualification period Page The Department s Guidance document Page Tripartite nature of agency work maintained Page Assignments deemed to have started on 5 December 2011 Page 4 PART 2 WHO IS, AND IS NOT, COVERED BY THE ACT PAGE The Act applies to unlicensed employment agencies. Page The Act does not apply to certain categories Page Managed service contractors Page Limited liability contractors Page Practical steps when engaging limited liability contractors Page Other four-party agency relationships Page Secondments Page Exceptions and limitations regarding agency workers Page 8 PART 3 EQUAL TREATMENT PAGE Basic working and employment conditions Page Definition of pay Page Overtime Page Annual leave Page Other types of leave Page Piece work may have a broad meaning Page Anti-avoidance : breaks of 3 months or less Page Aggregation of service for breaks of not more than 3 months Page New rates to apply only if anti-avoidance does not apply Page No flesh and blood comparator is required Page 13 PART 4 EXCEPTIONS, LIMITATIONS AND VARIATION PAGE Exceptions and limitations Page To avail of the permanent agency work exception Page Written notification in advance of employment Page Pay between assignments Page Termination of a permanent agency work contract Page 15 1

2 4.6 Collective agreements which may vary conditions Page Agency workers interests must have been represented Page 16 PART 5 RETROSPECTION PAGE 17 PART 6 COMMUNICATION BETWEEN HIRERS AND AGENCIES PAGE Hirers must provide information to employment agencies Page The questions employment agencies are likely to ask Page 18 PART 7 - ACCESS TO DIRECT EMPLOYMENT WITH HIRER PAGE Section 11 access to employment with the hirer Page Service requirements are still valid Page What vacancy is for the purposes of this provision Page Limited advertisements Page 20 PART 8 - ACCESS TO COLLECTIVE FACILITIES OF THE HIRER PAGE Section 14 obligations of hirers to agency workers Page Identifying collective facilities Page Matters excluded from the collective facilities provision Page Objective justification for not allowing access Page No requirement to provide training opportunities PART 9 PENALISATION, REDRESS AND LITIGATION PAGE Penalisation Page Redress and time limits Page Distinguishing hirer liability from employment agency liability Page Offences; direct recruitment of former agency workers Page No change in the fact that the hirer is deemed to be the Page 25 employer under the Unfair Dismissals Acts PART 10 - AMENDMENTS OF OTHER LAWS PAGE Terms of Employment (Information) Act 1994 Page Protection of Employment Act 1977 Page Transfer of Undertakings Regulations Page Other legislation amended Page 27 Published by IBEC May 2013 IBEC All rights reserved 2

3 PART 1 INTRODUCTION AND OVERVIEW 1.1 Introduction The Protection of Employees (Temporary Agency Work) Act 2012 ( the Act ) was enacted on 16 th May The Act transposes EU Directive 2008/104/EC ( the Directive ) into Irish law. This note summarises is IBEC s current understanding of the Act. The Act is very different from other pieces of employment legislation. The protections given to temporary agency workers by the Act differ significantly from those given in other statutes to (for example) part-time and fixed term employees. The interpretation of the Act may change over time, depending on the outcome of litigation which may arise before rights commissioners, the Labour Court and the High Court. This note is not a substitute for legal advice. Detailed legal advice should be taken in respect of any issue arising for IBEC member companies under the Act. 1.2 Overview of the Act Almost all existing employment legislation already provides protections to agency workers on the same basis as those provided to directly recruited employees. This Act provides three core additional rights for each agency worker. 1. The right to receive the same basic working and employment conditions as those which he or she would have received if recruited directly by the hirer to do the same or similar work during his or her assignment. 2. The right to receive equal access to collective facilities (such as crèche, canteen and transport services) as direct recruits receive. 3. The right to have direct employment opportunities advertised to him or her on same basis as they are advertised to direct recruits. The corresponding obligation in respect of basic working and employment conditions is borne by the employment agency. The corresponding obligations in respect of collective facilities and the advertisement of direct employment opportunities are borne by the hirer. The Act also contains a number of ancillary provisions, such as: a prohibition of penalisation of an agency worker who asserts his or her rights; a prohibition of false accusations of breach of an agency worker s rights; and a redress mechanism whereby an agency worker may bring a claim of noncompliance to a rights commissioner. 1.3 No qualification period The Act does not provide any qualification period for these rights. Each agency worker is entitled to these rights from the first day of his or her assignment to a hirer. 3

4 1.4 The Department s Guidance document The Department of Jobs, Enterprise and Innovation ( the Department ) has produced a Guidance document on its interpretation of the Act. The Guidance is not a legal interpretation of the Act but is a useful guide as to what the Department intended the Act to achieve and a very helpful summary of the contents of the Act. The first edition of the Guidance was published on the Department s website on 31 st August Further editions of the Guidance may be published from time to time. 1.5 Tripartite nature of agency work maintained The Act does not change the tripartite nature of agency work. It remains the case that for an arrangement to be an agency work arrangement, there must be three parties who have an ongoing relationship with each other, namely: the agency worker, being an individual employed by an employment agency under a contract of employment 1 by virtue of which the individual may be assigned to work for, and under the direction and supervision of, a person other than the employment agency ; the employment agency, which is a person 2 who employs an individual under a contract of employment by virtue of which the individual may be assigned to work for, and under the direction and supervision of, a person [other than the employment agency] ; and the hirer, which is a person for whom, and under the direction and supervision of whom, an agency worker carries out work pursuant to an agreement between the employment agency [and the hirer]. The Department s Guidance confirms as follows: The Act maintains the tripartite nature of agency working and the employment agency remains the employer and any actions taken by hirers in compliance with the Act should not be taken as evidence that a direct employment relationship exists between the hirer and the agency worker. 1.6 Assignments are deemed to have started on 5 December 2011 Any agency worker who was on an assignment prior to 5 December 2011 and who continued on that assignment after that date is deemed to have commenced his or her assignment on 5 December Note that civil servants and certain categories of public service office-holders are deemed to be employees employed under a contract of employment for the purposes of the Act. 2 Note that a company is a person for the purposes of these definitions. 4

5 PART 2 WHO IS, AND IS NOT, COVERED BY THE ACT 2.1 The Act applies to unlicensed employment agencies The definitions of agency worker, employment agency and hirer which are used in the Act are based on the nature of the actions, activities and contractual obligations of the people concerned. They are not dependent on one of the parties having a licence to operate as an employment agency. It is the case that a person carrying on the functions of an employment agency is obliged to have a licence from the Department to operate as an employment agency. This obligation was imposed by the Employment Agency Act 1971 ( the Act of 1971 ). That does not mean that a person who has failed to obtain a license does not come within the definition of an employment agency. The Act appears to use a broader definition of employment agency than the definition used in the Act of It also amends the definition of employment agency in the Act of 1971 to include both employment agencies as defined in the Act of 1971 and employment agencies as defined in the Act [of 2012]. Some entities which may in the past have operated as contracting companies may now be held to be employment agencies. 2.2 The Act does not apply to certain categories The Department s Guidance clarifies that the Act does not apply to certain categories of persons. These categories are not excluded by the Act, but they are outside coverage because they do not fit within the definitions of agency worker and employment agency used in the Act. The Department s Guidance identifies three categories, as follows. Independent contractors. Placement services [ie recruitment agencies, where the agency is paid for making an introduction between and employee and a company, but the employee does not have any contractual relationship with the agency]. Managed service contractors (see below). The Act does not apply to work carried out pursuant to a placement under certain categories of training programmes, including FÁS courses, the national internship scheme and other schemes which the Minister may specify by order. 2.3 Managed service contractors The Department s Guidance makes it clear that managed service contractors are not employment agencies within the meaning of the Act. These are companies which provide a specific service to a customer, such as catering or cleaning which is based on a contract for the provision of services that 5

6 will often set out agreed service level arrangements. The Managed Service Contractor has responsibility for managing and delivering the particular service and employs, rather than supplies, the workers. 2.4 Limited liability contractors Individuals who are truly self-employed contractors are not agency workers within the meaning of the Act. A question arises about what can be described as limited liability contractors. This arises where: an individual owns a company, and that company operates as a contractor to a client company, but the only services offered by the contracting company are the services of the individual who owns the company. These entities may have the outward appearance of being a self-employed contractor, but operate within the legal structure of a limited liability company. The question is whether or not that individual an agency worker within the meaning of the Act. A further question arises as to whether or not his or her contracting company is an employment agency. The answers to these questions will not be clear unless and until there is litigation in relation to these questions. If these limited liability contractors are agencies within the meaning of the Act then they are also employment agencies within the meaning of the Act of 1971 they must be licensed by the Department to carry out the business of an employment agency. It is an offence to carry out the business of an employment agency without a licence. Furthermore, if they are agencies, their client companies may have obligations under the provisions of the Act which relate to access to collective facilities and advertisement of vacancies. Client companies may also have obligations to provide information to the contractor company in relation to relevant basic working and employment conditions applicable to direct recruits of the client company. The Act is not clear on the question of whether such contractor companies are employment agencies. The Department has declined, for the time being, to express a view on whether or not such a situation amounts to an agency work situation. 2.5 Practical steps when engaging limited liability contractors The position may become clearer in due course, in the event of any litigation under the Act or prosecutions under the Act of In the meantime, hirers may wish to take one of the two following courses of action. 6

7 1 In the event that the contracting company accepts that it is an agency, the client company should comply with its obligations as a hirer under the Act. 2 In the event that the contracting company asserts that it is not an employment agency, the client company may require the contracting company to provide the client with: (a) confirmation that, because it does not believe that it is an employment agency, the contractor company does not require any information to be provided abut the basic working and employment conditions applicable to direct employees of the client company and further confirmation that the contractor company will not invoke any indemnity under section 15(2) of the Act; and (b) an indemnity against any claims which might subsequently be made by any employee of the contracting company against the client company further to rights asserted under section 11 (access to direct employment) or section 14 (access to collective facilities and amenities) of the Act. 2.6 Other four-party agency relationships Some agency relationships are established by way of a four-party, rather than a three-party, relationship. These sometime arise in circumstances whereby: a hirer enters a contract with a lead employment agency which in turn sub-contracts recruitment for particular positions to smaller employment agencies which enter into contracts of employment with agency workers who work for, and under the direction and supervision of, the hirer. In principle, whichever of these employment agencies is the person who entered into the contract of employment with any particular agency worker would be the employment agency for the purposes the Act in relation to that agency worker. The ultimate end-user would normally be the hirer for the purposes of the Act. However, careful advice should be taken in such circumstances, as these situations may be particularly complex. 2.7 Secondments The Department s Guidance does not express a view on whether an individual who is on what is called secondment from one organisation to other would come within the definition of an agency worker used in the Act. In most cases, it is likely that he or she would not be an agency worker. This is because a typical secondee s contract of employment would not include a provision which allows the employer to 7

8 assign the individual to work for a third party 3. Rather the assignment would typically arise later, in response to some change in circumstance which was not anticipated at the date on which the contract of employment was made. However, the nature of secondments is such that many secondments are arranged on an ad hoc basis. There is no universally applicable rule in respect of them and each would need to be considered on its own merits before a view is formed as to whether any given secondment may, in reality, be an agency situation. 2.8 Exceptions and limitations regarding agency workers Note that even where a worker is covered by the provisions of the Act, certain exceptions and limitations exist which may mean that certain agency workers do not have any claim on any particular basic working and employment conditions. These exceptions and limitations are addressed below. 3 Noting the definition of an agency worker includes a requirement that the individual s contract of employment is one by virtue of which the individual may be assigned to work for a hirer. 8

9 PART 3 EQUAL TREATMENT 3.1 Basic working and employment conditions This Act is different to other types of equality legislation because it does not require equal treatment in every respect. It requires equal treatment in respect of a specified category of basic working and employment conditions. These are terms and conditions of employment which are generally applicable in the workplace and which relate to: a) pay (which is narrowly defined, see below), b) working time, c) rest periods, d) rest breaks during the working day, e) night work, f) overtime, g) annual leave, or h) public holidays. 3.2 Definition of pay The equal pay to which an agency worker is entitled does not include all elements of the remuneration package which would apply to direct recruits. Pay is limited to the following items. a) Basic pay, and b) any pay in excess of basic pay in respect of (i) shift work, (ii) piece work, (iii) overtime, (iv) unsocial hours worked, or (v) hours worked on a Sunday. The definition of pay expressly excludes occupational social security schemes which term encompasses, amongst other things, sick pay, payments under any pension scheme and financial participation schemes. The definition of pay implicitly excludes anything not listed in the definition of pay, such as bonus pay 4, maternity top-up, ex-gratia redundancy payments. 4 Though note that the Department s Guidance indicates that some payments which might be described as bonuses such as a production bonus in a manufacturing operation might be found to amount in reality to piece work, which does come within the definition of pay. See section 3.6 below. 9

10 3.3 Overtime Overtime is included both in the definition of basic working and employment conditions and in the definition of pay which is a subset of basic working and employment conditions. This may indicate that there are several means by which equal rights in respect of overtime may arise. (i) Equality in respect of the rate of an overtime premium An agency worker will be entitled to the same premium for overtime work as he or she would have received had he or she been hired directly to do the same or similar work. Thus, for example, if all directly recruited general operatives get a premium rate of time and a half for overtime, agency general operatives would also get time and a half. (ii) Equality in respect of the threshold for receipt of overtime premium An agency worker will be entitled to have the same periods of work qualify as overtime as would have qualified had he or she been hired directly to do the same or similar work during that assignment. Thus, for example, if directly recruited general operatives would have qualified for overtime after 39 hours work during a working week, then agency workers who do the same or similar work as such general operatives in that hirer undertaking will normally be entitled to overtime on the same basis. IBEC believes that agency workers will not have any entitlement further to the Act to request or be offered overtime hours. It does not appear to IBEC that the availability of overtime hours is a term or condition of employment and therefore could not be a basic working and employment condition. Thus, where a limited amount of overtime is available in a hirer, the hirer would appear to be entitled to offer overtime to direct recruits first, and only offer overtime to agency workers if there is insufficient take-up by direct recruits. 3.4 Annual leave Entitlements in relation to annual leave are included among the basic working and employment conditions in respect of which agency workers are entitled to equal treatment. Further to the Organisation of Working Time Act 1997, agency workers are entitled to the same statutory minimum annual leave as all other employees, namely 4 working weeks. The new provision in the Act should probably be read as extending entitlements insofar as they relate to amounts of annual leave in excess of the 4 week minimum period to which direct recruits are entitled. Therefore, where an agency worker can establish that, if he or she had been recruited directly by the hirer, he or she would have been entitled to a period of 10

11 annual leave in excess of the statutory minimum that agency worker will be entitled to the extra amount of leave. The extra amount would be pro-rated in respect of assignments which do not last throughout the entire leave year. A question arises as to how that additional leave is to be granted by the employment agency. So, for example, where all full-time direct recruits of a hirer receive 25 days annual leave per year, and the contract of an agency worker assigned to that undertaking provides that the worker is entitled to the statutory minimum period of 4 working weeks (which in this case amounts to 20 days), then the agency worker would entitled to additional 5 working days per full year while on that assignment (and a pro-rated amount for lesser periods of assignment), but it is not clear precisely how the benefit of those 5 working days is to be conferred on the agency worker. In general employment law, annual leave entitlements in excess of the statutory four weeks leave may be converted to a cash equivalent provided the employee agrees. In an agency work situations, employment agencies may wish to have the option of converting additional days annual leave arising from the Act to a cash payment. It appears to be appropriate for an employment agency to so convert. However, this is not precisely provided for in the legislation, so an employment agency wishing to convert additional leave to cash payments should obtain the written consent of the agency worker to do so in advance of the start of the assignment, or in the agency worker s contract of employment. 3.5 Other types of leave Equal treatment must be given in respect of annual leave and leave in respect of public holidays. There is no requirement for agency workers to be treated the same as direct recruits in respect of other types of leave. So for example, where a hirer offers paternity leave to direct recruits who have recently become fathers, there is no obligation to provide paternity leave to agency workers assigned to that hirer. Similarly, where a hirer offers its direct recruits enhanced terms in relation to statutory leave such as by way of paying maternity top-up an agency worker assigned to that hirer would not be entitled to such enhanced terms. Study leave, compassionate leave, paid career breaks are similarly outside the scope of the equal treatment provisions. However, companies should be careful to ensure equal treatment in respect of leave which is in the nature of annual leave but which might be described as something different. So-called company days and service days might constitute annual 11

12 leave within the meaning of the Act and, if so, would give rise to an entitlement to agency workers. Companies should take advice in respect of any arguable cases. 3.6 Piece work may have a broad meaning The expression piece work is not defined in the Act. The Department s Guidance indicates that the term has a broader meaning than the traditional sense in which it is used in the manufacturing sector. The Guidance says that it applies in a wider context to output performance bonuses, commission linked to sales, output or production targets etc. 3.7 Anti-avoidance : breaks of 3 months or less The Act contains an anti-avoidance provision, which applies: where an agency worker is employed on a series of two or more assignments; with the same (or a connected) hirer; working at the same place, or in different places but where the work is directed or supervised from the same place; doing the same or similar work under the same or similar conditions; and any break between assignments does not exceed 3 months. In such situations, the series of assignments is treated as a single assignment for the purpose of determining the agency worker s basic working and employment conditions, except that the duration of the breaks does not count as being part of the assignment. This has a number of practical consequences. 3.8 Aggregation of service for breaks of not more than 3 months One consequence of the anti-avoidance provision is the aggregation of service. This relates to assignments in hirer companies which have generally applicable service-based increments, such as where a direct recruit starts work at one rate of pay and automatically increases after (for example) one year s service. If an agency worker were to: be assigned to such a hirer for six months; not be assigned there for two months; be assigned for a second time for a further six months; not be assigned there for a further two months; and return for a third assignment; then the agency worker would, on the third assignment, be considered to have 12 months service and would therefore start the third assignment on the second point of the pay-scale. 12

13 3.9 New rates to apply only if anti-avoidance does not apply Where a hirer introduces a new generally applicable set of basic working and employment conditions for direct recruits which are lower than the ones which had previously applied, it will normally be the case that agency workers assigned to that hirer after the date of such introduction will start on that new conditions. However, if the agency worker has previously been assigned to that hirer, and the anti-avoidance provisions apply, the returning agency worker will normally return on the old (higher) basic working and employment conditions rather than the new conditions No flesh and blood comparator is required The Act does not require that a comparable direct recruit exists in order for an agency worker to have entitlements in respect of basic working and employment conditions. The fundamental principle in the Act is that an agency worker is entitled to receive the same basic working and employment conditions which he or she would have received if he or she had been recruited directly (as an employee of the hirer) to do the same or similar work during his or her assignment. This absence of a requirement for a comparator does not mean that comparable direct recruits where they exist are irrelevant. If a hirer employs direct recruits; and those direct recruits do the same or similar work as an agency worker; and those direct recruits receive the same basic working and employment conditions as the agency worker, then those facts will be strong evidence that the employment agency has complied with its obligations in respect of the agency worker. However, there are situations where an agency worker might legitimately receive different basic working and employment conditions than direct recruits who do the same or similar work. These could include the following situations. Where the direct recruits have longer service than the agency worker. Where the direct recruits have greater skills, better qualifications or more experience than the agency worker. Where the hirer has revised its generally applicable terms (such as by introducing a new pay scale for newly employed direct recruits) prior to the commencement of the agency worker s assignment with the hirer. None of these situations are specifically set out in the Act. They will be matters which will need to be addressed on a case-by-case basis within the context of the fundamental principle set out above. 13

14 PART 4 EXCEPTIONS, LIMITATIONS AND VARIATION 4.1 Exceptions and limitations A number of exceptions and limitations apply to the general principle of equal treatment of agency workers. The following is not an exhaustive list. 1 The equal treatment provisions in the Act do not have any practical effect where there are no generally applicable terms and conditions of employment in the hirer. Generally applicable terms include contractual terms set out in collective agreements or company handbooks. The Department s Guidance indicates that generally applicable terms include established payscales, a term which appears to encompass any standardised company practices. The term does not include individually negotiated terms. So, for example, where an agency worker is hired to fill a unique role in a hirer company in respect of which there is no established rate of pay the agency worker does not have a right under the Act to any particular rate of pay. 2 Employment agencies may exclude the provisions of the Act that relate to pay by using a new type of contract, a permanent contract of employment. Certain conditions must be met before an agency worker can be said to be a permanent agency worker see sections 4.2 to 4.5 below. Permanent agency workers are covered by all provisions of the Act other than those relating to pay. 3 The Act provides that different working and employment conditions may be established for agency workers than for direct recruits. This can be done by making collective agreements which comply with certain requirements specified in the Act. See section 4.6 below for more detail. 4.2 To avail of the permanent agency work exception To avail of this exception certain conditions must be met, including the following. The permanent agency worker must receive, in advance, written notification that the equal pay provisions will not apply if they sign the contract. Provision must be made for the permanent agency worker to be paid between assignments. 4.3 Written notification in advance of employment The agency worker must be notified in writing prior to signing the permanent employment contract that if he or she enters into the contract, the provisions in relation to [equal] pay in the Act will not apply to him or her. The Department s Guidance suggests that an employment agency should inform the agency worker in writing of the implications of this derogation so they can make 14

15 an informed decision as to whether they are willing to agree to forego this right and enter into such a contract. The Guidance here may be read as expressing best practice but as going beyond the basic requirement in the Act, which is merely to notify (as described above) rather than explain in detail the implications of signature. 4.4 Pay between assignments In order to qualify as a permanent agency worker, the worker must be entitled to be paid between assignments that is, to be paid while not actually working. This must amount to at least 50% of the pay during his or her most recent assignment and is subject to other provisions which may further increase the amount payable. The provision is somewhat ambiguous. There are a number of possible interpretations of it. Employment agencies should take specific advice if they are considering using a permanent agency work model. For the purposes of illustration, the following is provided as one possible way of applying the provision, which appears to give effect to the principles in the Act. In this example, the permanent contract of employment would provide that, between assignments, the worker will be paid the greater of the following: (a) 50% the agency worker's normal weekly 5 remuneration at the time of termination of his or her last assignment before the period between assignments; or (b) a sum equal to the product of: (i) the normal weekly working hours at the time of termination of the assignment and (ii) the national minimum hourly rate of pay for the time being applicable to the employee further to Part 3 of the National Minimum Wage Act 2000, or such other minimum hourly rate of pay which applied (further to any other enactment or collective agreement) to the agency worker immediately before the termination of his or her last assignment before the period between assignments. It appears to IBEC that the pay between assignments provisions would not apply where an agency worker has been given an assignment but unjustifiably refuses to attend for work at that assignment. 5 Weekly is used here for illustrative purposes. The National Minimum Wage Act 2000 permits pay reference periods of up to one month, so, for example fortnightly or monthly could be used instead. It would appear appropriate to use the same pay reference period for the purposes of pay between assignments as was used in the last assignment on which the employee worked. 15

16 4.5 Termination of a permanent agency work contract The Act defines a permanent contract of employment as a contract of indefinite duration. Therefore, such a contract is terminable in the normal may for lawful reasons (including redundancy) on appropriate notice. Unlike the equivalent provisions in the UK, the Act does not provide for any period of non-assignment during which a permanent agency worker may not be dismissed Collective agreements which may vary conditions The Act provides that different working and employment conditions may be established for agency workers than for direct recruits. These collective agreements may allow for variation of entitlements of agency workers. Such variation must respect the overall protection of agency workers. This probably means that the aggregate benefits received by affected agency workers should not be less favourable than the benefits the agency workers would otherwise have received if no collective agreement had been made. Such collective agreements may be made by: an employer or hirer or an association representing employers or hirers (on the one hand), and a body or bodies representing employees on the other hand, which must be a trade union or an excepted body. To be effective, such collective agreements must be registered by the Labour Court. Collective agreements are the only means by which agency workers entitlements may be approximated to those they would have received as direct recruits. 4.7 Agency workers interests must have been represented Before a collective agreement is registered by the Labour Court, certain requirements must be met. These include a requirement that the body or bodies that negotiated the agreement on behalf of employees is or are, in the Labour Court, sufficiently representative of agency workers. This appears to mean that, where a trade union is recognised for the direct recruits who work in an enterprise but that union does not sufficiently represent agency workers who are assigned in that enterprise, the Labour Court may not register any collective agreement purportedly made further to this section. 6 Regulation 10(1)(d) of the UK s* Agency Workers Regulations 2010 in effect requires employment agencies to pay a permanent agency worker for an aggregate of not less than four weeks between assignments before the contract of the permanent agency worker may be terminated. (*Note that somewhat different provisions apply in Northern Ireland). 16

17 PART 5 RETROSPECTION The elements of the Act which relate to pay purport to have retrospective effect to 5 December That is the date by which Ireland should have enacted this legislation in order to comply with European law. Employment agencies applying these retrospective provisions would need to calculate the difference between: what each agency worker would have received (had they been directly recruited to do the same or similar work) in the period from 5 December 2011 and 16 May 2012; and what each agency worker actually received in that period; and pay each agency worker the difference, if any. This retrospective provision might also apply to pay for annual leave during that period of retrospection, though not to the amount of annual leave to which an agency worker would have been entitled during that period. IBEC believes that there are significant constitutional concerns about this provision. However, we are not aware of any challenge having been issued in the High Court in respect of it. In the absence of a High court challenge, a rights commissioner or the Labour Court appear to be obliged to apply the retrospective provisions. 17

18 PART 6 COMMUNICATION BETWEEN HIRERS AND AGENCIES 6.1 Hirers must provide information to employment agencies The core obligation in the Act to provide each agency worker with equal treatment in respect of basic working and employment conditions falls on employment agencies. To provide such equal treatment, employment agencies need to be informed by hirers what basic working and employment conditions would have applied to each agency worker if he or she had been employed as a direct recruit. To that end, the Act creates an obligation on hirers to provide employment agencies with enough information to ensure that the employment agencies can comply with their obligations under the Act. 6.2 The questions employment agencies are likely to ask The fundamental question an employment agency would ask each hirer in respect of any agency worker (or category of agency workers) would be the following. Are there any generally applicable arrangements (set by law, collective agreements, company handbooks, standard company practice or similar means) which establish the terms and conditions of employment which are to be included in the contracts of employment of direct recruits who would do the same or similar work as the agency worker(s) in question? If there are no such generally applicable arrangements, then the principle of equal treatment will not have any practical effect for the employment agency in that case. If any generally applicable arrangements exist, then the following questions would also need to be answered. 1. What basic pay would be payable to a direct recruit doing the same or similar work? 2. What premium would be payable to a direct recruit in respect of shift work? 3. What amount would be payable to a direct recruit in respect of piece work? 4. What premium would be payable to a direct recruit in respect of overtime and what terms and conditions would apply in respect of overtime? 5. What premium would be payable to a direct recruit in respect of unsocial hours? 6. What provision would be made for Sunday work (if Sunday work were done)? 7. What terms and conditions would apply to a direct recruit in respect of working time? 8. What terms and conditions would apply to a direct recruit in respect of rest periods and rest breaks during the working day? 9. What terms and conditions would apply to a direct recruit in respect of night work? 10. What terms and conditions would apply to a direct recruit in respect of annual leave? 11. What terms and conditions would apply to a direct recruit in respect of public holidays? 18

19 PART 7 - ACCESS TO DIRECT EMPLOYMENT WITH HIRER 7.1 Section 11 access to employment with the hirer The Act provides that a hirer shall, when informing his or her employees of any vacant position of employment with the hirer, also inform any agency worker for the time being assigned to work for the hirer of that vacant position for the purpose of enabling the agency worker to apply for that position. This is expressed as an obligation only to advertise vacancies to agency workers, but, having regard to the purpose of the Act and of the Directive, it may also impose an obligation to fairly consider any applications for direct employment which may be made by an agency worker in response to such an advertisement. This obligation only arises where the hirer is informing his or her employees of any vacant position of employment. It is not clear whether this covers a situation where there is no competitive process, but the employer instead selects a direct recruit to fill a role. In relation to this provision, some guidance may be drawn from the decisions of the Labour Court in relation to section 10 of the Protection of Employees (Fixed-term Work) Act 2003 ( the Act of 2003 ). That section provides a similar right of access to employment to fixed-term workers as the Act provides to agency workers Service requirements are still valid The Labour Court has held that access to employment further to section 10 of the Act of 2003 does not deprive employers of right to set qualifications for access to such positions. By analogy, it appears that section 11 of the Act [of 2012] allows a hirer to require applicants for vacancies to have a certain amount of service with the hirer. The Department s Guidance says: The above obligation does not, however, constrain hirers freedom regarding: Any qualification or experience requirements, such as time in service with the organisation; or The manner in which they treat applications. 7.3 What a vacancy is for the purposes of this provision Employers have asked what a vacant position is for the purposes of this provision. Common questions include: 7 Comparisons should be drawn carefully because there are material differences between the two comparable provisions. 19

20 whether the provision applies to the filling of promotional posts and whether the provision applies to situations whereby direct recruits are offered the opportunity to be redeployed in the context of a redundancy situation in the company. A vacant position of employment is not defined in the Act. In interpreting the comparable provisions of section 10 of the Act of 2003, the Labour Court has held that the filling of a promotional post is the filling of a vacancy and so fixed-term workers are entitled to compete for promotional positions. 8 In IMPACT v Aer Lingus 9, the respondent company asked the Labour Court, in interpreting section 10 of the Act of 2003, to hold that the redeployment of permanent staff as part of a redundancy situation was not the filling of vacancies. The implication of that argument was that fixed-term workers would not be entitled to apply for such roles. The Court did not decide that question because it decided the case in the company s favour on another point. It remains to be seen whether such redeployment would be held to be a vacancy for the purposes of the Act Limited advertisements The Act is not clear what is to occur where a hirer makes a limited advertisement to its direct recruits. For example, if a hirer operates at a number of locations, and advertises a role to direct recruits at only one location, is the obligation to advertise to agency workers at that location only or at all locations? The Department s Guidance suggests that the obligation to advertise does not oblige hirers to advertise positions more widely to agency workers than to direct recruits. It says: Agency workers are entitled to information on job vacancies in the hirer in the same way as if they had been directly recruited by the hirer to do the same or similar job. This view is grounded in article 6(1) of the Directive, which says: Temporary agency workers shall be informed of any vacant posts in the user undertaking to give them the same opportunity as other workers in that undertaking to find permanent employment. It seems that the obligation does not require hirers to advertise vacant positions more broadly to agency workers than to direct recruits. 8 In Minister for Finance v McArdle FTD 063, in a decision later upheld by the High Court. 9 FTD It is interesting that the extract from the Department s Guidance referred to in paragraph 7.2 above is almost identical to the equivalent provisions of a guidance document prepared by the equivalent UK government department. However, the Irish Guidance does not replicate the succeeding paragraph in the UK guidance, which says: The right will not apply in a genuine headcount freeze where posts are ring-fenced for redeployment purposes or internal moves which are a matter of restructuring and redeploying existing internal staff in order to prevent a redundancy situation. 20

21 PART 8 - ACCESS TO COLLECTIVE FACILITIES OF THE HIRER 8.1 Section 14 obligations of hirers to agency workers The Act provides that a hirer shall, as respects access to collective facilities and amenities at a place of work, treat an agency worker no less favourably than an employee of the hirer unless there exist objective grounds that justify less favourable treatment of the agency worker. 8.2 Identifying collective facilities The Act gives three examples of what is included in the expression collective facilities, namely: a) canteen or similar facilities, b) childcare facilities, and c) transport services. The Department s Guidance gives further examples as follows: toilet/shower facilities; staff common room / kitchen facilities food and drink machines; and car parking. 8.3 Matters excluded from the collective facilities provision The Department s Guidance gives assistance in determining what matters may be excluded from the expression collective facilities. In relation to transport services, the Guidance indicates that local pick-up and drop off transport service or transport between site is covered but the provision does not extend to benefit-in-kind type entitlements or contributions towards company cars. The Guidance further states that This right of access to facilities/amenities is essentially about access to onsite facilities amenities and does not extend to off-site facilities, or benefits in kind, which may be provided by the hirers as part of a benefit package to reward long-term service and loyalty such as e.g. subsidised access to an offsite gym, although this does not of course prevent hirers offering such benefits to agency workers, should they choose. The Department s Guidance stresses that access to collective facilities for agency workers can be made subject to the same requirements as those which apply to direct recruits. For instance, if access to a crèche involves joining a waiting list, agency workers would be entitled also to join the waiting list, but would not be entitled to queue jump ahead of other direct recruits also on the waiting list. 21

22 This echoes the provisions of article 6(3) of the Directive, which provides that temporary agency workers shall be given access to the amenities or collective facilities in the user undertaking under the same conditions as workers employed directly by the [hirer]. 8.4 Objective justification for not allowing access This is the only provision in the Act in which objective justification is permitted for less favourable treatment of agency workers. Case law arising from similar statutes makes clear that objective justification is limited by several important principles. Most significantly, cost alone is unlikely to be accepted as an objective justification. Furthermore, an employer who pleads objective justification for less favourable treatment is likely to be required to establish several things, including: that the different treatment arose in pursuit of a legitimate objective of the employer, and that the means used in pursuit of that legitimate objective were appropriate and necessary for achieving those aims. These can be difficult matters to demonstrate, because derogations from the principle of equal treatment are likely to be interpreted strictly, so employers should take detailed advice before relying on any objective justification to deny agency workers access to collective facilities. The Department s Guidance suggests that where there is an objective justification for not granting agency workers access to collective facilities on an unlimited basis, it may nevertheless be appropriate to offer agency workers certain access to facilities on a partial basis, as an alternative to exclusion altogether. 8.5 No requirement to provide training opportunities The Act does not contain any provision comparable to section 10(3) of the Protection of employees (Fixed-term Work) Act That provision says As far as practicable, an employer shall facilitate access by a fixed-term employee to appropriate training opportunities to enhance his or her skills, career development and occupational mobility. In the absence of an equivalent provision, and given that training opportunities are not included in the list of basic working and employment conditions provided at section 2 of the Act [of 2012], it appears that there is no entitlement on the part of agency workers to the same training opportunities that they would have received had they been directly recruited by the hirer. 22

23 PART 9 PENALISATION, REDRESS AND LITIGATION 9.1 Penalisation In common with many employment statutes, the Act prohibits penalisation of persons who assert rights under the Act. In general, penalisation occurs where: an individual takes a protected action, and an employer reacted to the taking of that protected action by imposing some form of penalty. Therefore, in penalisation proceedings, it is not enough for the employee to establish that he or she suffered some negative effect. He or she must also establish that the negative effect occurred as a reaction to the protected action. The penalisation provisions in the Act are more complex than the typical penalisation provisions because of the tripartite nature of agency work. These provisions prohibit three types of penalisation. a) Penalisation of an agency worker by the employment agency. b) Penalisation of an agency worker by a hirer. c) Penalisation of direct recruits by a hirer. The protected actions in the Act are as follows. a) Invoking a right conferred by the Act. b) Opposing by lawful means an act that is unlawful under the Act. c) Making a complaint to [NERA] or the Gardaí that the Act has been contravened. d) Giving evidence in proceedings under the Act. e) Giving notice of intention to take one of the preceding actions. The prohibited negative reactions are anything that affects an employee to his or her detriment, including the following. a) Suspension, lay-off, dismissal or the threat thereof. b) Demotion or loss of promotion. c) Transfer of duties, change of location of work, reduction in wages or change in working hours. d) Imposition of any discipline or other penalty e) Coercion or intimidation. In addition to the protection from penalisation, the Act also provides a statutory protection from litigation for any person who, in good faith, reports an alleged breach of the Act to [NERA] or the Gardaí. 23