COVID-19 – Temporary and Agency Employee Rights

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With the Government announcing more financial support for those unable to work due to the Coronavirus pandemic, many people are considering what support they are eligible for. But what support can temporary/agency employees get from the government if there’s limited work due to the economic impacts of Coronavirus? And what qualifies as an employment contract? Below we answer frequently asked questions on the employment rights of temporary and agency employees.

What kind of contract do temporary and agency employees have with their agency?

It depends. Some temps are employed by the agency itself and receive holiday and sick pay etc. Others are in limbo – the agency won’t employ them and says they only provide a connection to the end user of the worker’s services – but the end user says they don’t employ them either. It’s not very satisfactory and it means these workers don’t know who to look to, about their employment rights.

What’s the difference between a contract for provision of services and an employment contract?

Sometimes employment contracts are called “contracts of service”. Self employed people do not have contracts of service – they work on what are called “contracts for services”.

The difference made by swapping the “of” for a “for” can be substantial – certain important rights such as the right not to be unfairly dismissed or the right to a redundancy payment, are only available to employees. “Workers” and truly self-employed people do not enjoy either right. Even for employees the rights are limited – you can only claim unfair dismissal or a redundancy payment if you have been continuously employed for 2 years or more.

If a temp has worked for the same agency, and the same client for over 12 months and has been paid via PAYE, received holiday pay and had pension deductions, does this mean they have had a contract of employment?

Again, it depends. The contractual paperwork between the worker and the agency might be important to show what the worker’s status is. Sometimes a worker can be an employee even if all the paperwork says they’re not. There are some complex legal tests to determine employment status. To make things worse, you can be an employee for tax purposes, but have a different status in an Employment Tribunal.

What support can temporary/agency employees get from the Government if there is no more work due to the economic impacts of Coronavirus?

If they’re paid by PAYE, then subject to a few conditions they can be furloughed and whoever pays them can claim back 80% of their pay – so they can expect to receive 80% of pay subject to an overall cap. If they’re self-employed then again there are conditions, but they might well qualify for help from the government’s self-employed scheme. They need to earn less than £50Kpa and have filed some tax returns amongst other conditions.

What documents/information should a temporary worker take to a solicitor if they’re asking for clarity about their contractual arrangements?

A solicitor will ask to see all of the contract paperwork and any letters or emails that show how the contract was made or what’s been said about it or about how it works in practice. Examples of how the company controls what they do from day to day, whether they have to do the work themselves or can send a substitute, and whether they have to do all the work they’re asked to do – these are all key questions for an adviser.

For further advice contact our employee rights team, or subscribe to our monthly newsletter.