Tom Coghlin QC considers the important judgment of the Employment Appeal Tribunal (EAT) in Kocur v Royal Mail and anor UKEAT/0181/17, a decision which brings much-needed clarification to the rights of agency workers to the same basic working and working conditions under the Agency Worker Regulations 2010. Nathaniel Caiden of Cloisters appeared for the successful appellant.
Despite the Agency Worker Regulations 2010 (AWR) having been around for some time, there have been very few appellate cases.
The AWR in essence confer two categories of rights:
- Day 1 rights – the right to the same access to “collective facilities and amenities” such as staff canteens, childcare and transport as a comparable employee of the hirer, and to be informed about job vacancies. These rights are set out in Reg 12; and
- 12 week rights – following a 12-week qualifying period the right to the same basic working and employment conditions in relation to certain specified terms. These rights are found in Regs 6 and 7.
The present case concerned these so-called 12 week rights. It sets out much-needed general guidance as to what exactly is required by the regulations.
The ET decision
Mr Kocur was an agency worker who had worked for the hirer, Royal Mail, long enough to become entitled to 12 week rights.
The Employment Tribunal (“ET”) rejected three claims of his that his rights under AWR were breached namely:
- As to holidays, those working directly for Royal Mail were entitled to 30.5 days’ holiday whereas the agency workers only had 28 days. However, the greater pay of the agency worker and fact that they could ‘self impose’ the 2.5 day difference meant there could be no breach.
- As to rest breaks, both those working directly for Royal Mail and the agency workers were entitled to 1-hour rest breaks. However the agency worker were paid for only half this time, at their higher rate of pay, but those working directly for Royal Mail were paid for the full hour, at their lower rate of pay. The ET thought that in fact the higher pay of the agency worker must off-set any loss which might be regarded as being suffered, as over an entire shift the agency worker still ended up with more pay than those directly working for the Royal Mail.
- Finally, it was argued that there had been a breach of ‘duration of working hours’ as Mr Kocur was not given the same weekly contractual hours as someone working directly for the Royal Mail. The ET rejected this as a proper comparator could not be identified and because a claim of this sort ran against the whole point of agency work in general.
The EAT’s decision
Mr Kocur appealed to the EAT on three grounds:
- Ground 1: that the ET had been wrong to hold that the Claimant’s lower annual leave entitlement could be compensated for by a higher rate of pay in the form of a rolled-up payment.
- Ground 2: that the ET had been wrong to reject the Claimant’s claim to be entitled to the same number of weekly hours as a direct recruit; and
- Ground 3: that the ET had been wrong to find that the difference in payment for rest breaks between the Claimant and direct recruits was compensated for by his higher rate of hourly pay.
The EAT (Mr Justice Choudhury) concluded as follows:
- Ground 1 of the appeal succeeded. In terms of holiday there was a disparity. That cannot be circumvented by one nominally taking the extra 2.5 days, as a voluntary taking of leave does not amount to an entitlement, and further it is difficult to see how that can be enforced. The AWR is not just concerned with the statutory 28 days minimum, so if one is provided with leave above the minimum, the agency workers are entitled to this once they qualify for reg.5(1) AWR protection. Moreover, greater pay or so-called payment in lieu does not amount to compliance.
- Ground 3 of the appeal succeeded. In this case there was no disparity as such in the duration of rest breaks (unlike the holiday leave above), but the difference in pay for the rest break (pay for half the time as against pay for all the time) was a breach. The term relating to rest breaks was not the same, and merely having a higher rate of pay cannot compensate this.
- Ground 2 of the appeal was dismissed. Although on a literal reading, the expression ‘duration of working time’ could include weekly hours, but properly construed it meant merely maximum shifts on the grounds that the Appellant’s interpretation/submissions would produce an absurd and unworkable outcome.
Legal principles and guidance by the EAT
The following points emerge from Mr Justice Choudhury’s judgment.
(1) The interpretation of the AWR is informed by EU Temporary Agency Workers Directive (No. 2008/104) (“Directive”) which underpins the AWR.
(2) Despite reg.5(1) AWR using the words “the same” and the Directive using the words “at least”, in this context “the same” means “at least”. (Judgment at -).
(3) The 12 week rights provided for by Regs 5 and 6 apply not just to the ‘relevant term and condition’ itself but those relating to it (judgment at , [38.a], [38.d]). In the appeal this was key, so even where there was the same time of rest breaks (or in the hypothetical the same holiday days) it was not enough as the term relating to it, pay, was different. Pay is obviously often related to all the relevant rights, but the same principle it seems would extend to other terms that ‘relate’. For example, in terms of requests or mechanisms for taking holiday perhaps.
(4) An employer cannot get around apparent disparity of terms by saying that a right can be ‘voluntarily’ taken or self enforced. This would be relevant to ‘non-pay’ terms such as holiday or breaks. If employees are entitled to a certain number of days unpaid holiday or breaks that are unpaid, it would not be consistent with reg.5(1) AWR, and the general protectionist philosophy underpinning it, for one to simply say that the agency worker can just voluntarily take the equivalent (judgment at [22.a]-[22.b]).
(5) Nor can an employer get around disparity of terms (eg fewer holidays, breaks, etc) by saying that a payment in lieu is being made or by merely having a higher rate of pay in general. So crucially hirers cannot make payment in lieu (if it could not equally do so for the direct recruits) to offset specific entitlements to annual leave (judgment at ). The EAT disagreed with the government issued guidance that suggests such payment in lieu above statutory minimum is possible (judgment at ).
(6) A term by term approach and not package based approach applies. This means that one cannot offset worse terms by better terms somewhere else in relation to those that fall within reg.6(1) AWR (judgment at ). This is the same approach that applies to equal pay and non-discrimination law. However, it is notable that a firm conclusion to that effect has yet to be reached in the context of the arguably analogous Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000.
(7) However rolled-up holiday pay is potentially possible. This deals with the mechanism by which parity is achieved. The government guidance suggests that such rolling-up is only possible for leave above the statutory minimum (in line with working time regulations case law). Although the point is not expressly spelt out, it appears that the EAT accepted that rolled up holiday pay was permissible for to that extent only. The EAT did however make clear that the requirement for rolling up in excess of statutory minimum also requires transparency and comprehensibility (judgment at -). The same was said to apply to rolling up pay for ‘rest breaks’ (judgment at [38.g]).
(8) The phrase “duration of working time” should be interpreted to meant that agency workers’ hours should not exceed those of a direct recruit (judgment at [44.b]).
It remains to be seen whether either party will seek to appeal to the Court of Appeal. For now at least, the EAT’s judgment brings welcome clarification to this area of the law.