The claimant was an agency worker and was supplied to the respondent through a third-party agency. After 12 weeks working he became entitled to ’12 week rights’ i.e. the same basic pay and working conditions as permanent employees. He argued that for each eight-hour night shift he was given a one hour break, but paid only for 30 minutes. Those employed directly, however, received a full hour’s pay. A claim was also brought with respect to annual leave, as those employed directly were entitled to more than 3 days’ extra annual leave compared to agency workers.

The Employment Tribunal dismissed the claims since agency workers were paid a higher hourly rate to compensate for the disparity. The EAT allowed the appeal and cited the fact that the Agency Workers Regulations 2010 (AWR – equivalent to the Agency Workers Regulations (Northern Ireland) 2011 in this jurisdiction) clearly state that agency workers are entitled to the same basic terms and conditions.

The failure to allow agency workers the same amount of leave cannot be compensated by a higher hourly rate. The EAT also held that there was a breach of the AWT in that the claimant did not receive the same pay for his rest breaks.

Practical Lessons

The upshot of this decision is that employers may not offset a failure to give agency workers a particular AWR entitlement by providing a higher rate of pay.

The entitlement as per the AWR is to the same basic terms and conditions on a 'term-by-term' basis. In other words, employers cannot point to the overall package and argue that comparable treatment is achieved.

However, the EAT did recognise that equivalence may be achieved in other ways. For example, employers could offer identical holiday pay by providing a lump sum at the end of an assignment or in 'rolled-up' holiday pay. The EAT stressed that if this approach is adopted then the payment mechanism deployed must be transparent.

Affected agency workers must be able to easily ascertain how much of their remuneration relates to annual leave. Employers therefore have a duty to explain in simple terms how their calculations are reached.
http://www.bailii.org/uk/cases/UKEAT/2018/0181_17_2302.html