Employment business escapes liability under AWR

The Employment Tribunal (ET) of Stevens v Northolt High School serves as a very useful reminder of the importance of employment businesses setting up appropriate systems with hirers to obtain comparator information.

Since the introduction of the Agency Worker Regulations 2010 (AWR), reported cases have been very rare. In the case of Stevens the Employment Tribunal held that the hirer, not the employment business, had to compensate the agency worker for failure to pay the same salary as a comparable, directly employed member of staff.

AWR states “..an agency worker (A) shall be entitled to the same basic working and employment conditions as A would be entitled to for doing the same job had A been recruited by the hirer.”

This is subject to the agency worker undertaking a “qualifying period” of 12 weeks employment with the hirer. The hirer and the employment business are jointly and severally responsible for any breaches of a workers rights under regulation 5, to the extent that they are responsible for the infringement. Employment businesses, however, can rely on a defence that they took ‘reasonable steps’ to obtain relevant information from the hirer and acted reasonably in determining the agency workers pay after the qualifying period.

Miss Stevens was engaged by the hirer as a music teacher. The employment business made repeated requests to the school for comparator pay information for directly recruited employees. This was never provided by the school and following the completion of her qualifying period Miss Steven’s pay was not increased. The ET considered that the employment business company had taken ‘reasonable steps’ to try and obtain comparator information and in the absence of being provided this information it was unable to quantify any increase.

Whilst employment businesses should actively seek to obtain comparator information from hirers employment businesses are likely to be able to satisfy a tribunal that they have taken reasonable steps if their contract with the hirer provides express obligations on the hirer to provide comparator information. It is also advisable for employment business to also include indemnities requiring the hirer to indemnity them in so far as they incur a liability as a result of the hirer’s breach of AWR.