Agency Workers in Ireland: A Practical Guide for Irish Employers

Introduction

The legislative framework governing agency workers in Ireland, the Protection of Employees (Temporary Agency Work) Act 2012 (the “2012 Act”) has been in place for almost 15 years but continues to be an area that generates questions for clients – particularly the obligations on hirers and employment agencies, what does equal treatment really mean and how is the legislation enforced in practice. This update will provide an overview of the area of law and practical tips for employers.

Legislative Framework

The 2012 Act, which transposed the EU Temporary Agency Work Directive, establishes the principle of equal treatment for agency workers in respect of basic working and employment conditions. The Employment Agency Act 1971 complements this by imposing regulations and licensing requirements upon employment agencies. Agency workers may also benefit from general protections under the Organisation of Working Time Act 1997, the National Minimum Wage Act 2000, and health and safety legislation, depending on the nature of the engagement.

The Equal Treatment Principle

Agency workers must not be treated less favourably than comparable direct employees of the hirer. From day one of an assignment an agency worker is entitled to the same “basic working and employment conditions.”

This includes pay, working time, rest periods and breaks, night work, overtime, annual leave and public holiday entitlements. Agency workers have the same entitlement to these working and employment conditions as if they had been directly recruited for the same job. “Pay” excludes occupational pension schemes, sick pay, bonuses, maternity pay and benefits in kind.

The legislation also contains anti-avoidance rules, which means that successive short-term assignments cannot be used to circumvent these rights. Where an agency worker is assigned to the same hirer, at the same location, to perform similar work, successive assignments will be treated as continuous unless there is a break of more than three months between them.

In practice, hirers must identify the appropriate comparator to identify what the agency worker should be paid and what conditions they would enjoy if directly recruited by the hirer.

Obligations on Hirers and Agencies

The 2012 Act imposes specific obligations on both the hirer and the employment agency:

• Hirer obligations: Provide equal treatment in relation to basic working and employment conditions and inform agency workers of internal vacancies as they arise.
• Anti-poaching clauses: An agency cannot restrict a worker from taking up direct employment with the hirer after an assignment ends. These anti-poaching clauses are void under section 12 of the 2012 Act.
• Prohibition on fees: An agency cannot charge a worker a fee connected with post-assignment employment by the hirer. The imposition of such a fee is a criminal offence under section 13 of the 2012 Act.
• Information obligations: Hirers must give agencies all information reasonably required for legal compliance and must indemnify the agency for losses caused by incorrect information. Failure to do so is an offence under section 15 of the 2012 Act.
• Access to facilities: Under section 14 of the 2012 Act, agency workers must have access to collective facilities and amenities (e.g. canteen, childcare, transport) on the same basis as direct employees, unless the decision not to allow access can be objectively justified. Notably, cost alone is an insufficient justification.

Who is Covered by the 2012 Act

The 2012 Act applies to workers who are assigned by an employment agency to work for, and under the direction and supervision of, a hirer.

This creates a triangular relationship in which the worker has a contract with the agency, the agency has a commercial arrangement with the hirer, and the worker performs work at the hirer’s premises under the hirer’s control. The 2012 Act does not apply to self-employed contractors, situations where the hirer is simply a client or customer, direct-placement services, managed service contracts (where workers remain under their own employer’s supervision), or certain publicly funded work placement schemes. The key distinguishing feature is direction and control: if the hirer directs and supervises the work, the Act is likely to apply.

The identity of the “employer” for the purposes of employment legislation depends on the context: the hirer bears the primary equal treatment obligation under the 2012 Act but the agency is the employer for the purpose of wages and statement of terms obligations. Under section 13 of the Unfair Dismissals (Amendment) Act 1993, the hirer, not the agency, is deemed the employer for unfair dismissal claims, so hirers are liable when an agency worker is dismissed.

It is important to distinguish the equal treatment principle under the 2012 Act from employment equality obligations under the Employment Equality Acts 1998–2015 (the “Equality Acts”). Under the Equality Acts, both the agency and the hirer can be liable for discrimination against an agency worker.

A limited “Swedish derogation” under section 6(2) of the 2012 Act disapplies equal pay (but not other conditions) for workers on a permanent agency contract, provided the agency gives written notice before the contract begins and pays at least half of the worker’s last assignment rate (and not less than the minimum wage) between assignments. The derogation is limited to pay only and does not disapply equal treatment for other basic working conditions. It is narrow in scope and depends on the contractual terms and payment arrangements between assignments.

Penalisation Protections

The 2012 Act separately prohibits both the agency and the hirer from penalising a worker for invoking their rights, making a complaint, or giving evidence. Penalisation includes dismissal, demotion, altered duties or hours, discipline, and coercion. Claims may be brought to the WRC within six months (extendable to twelve months for reasonable cause), with compensation of up to two years’ remuneration or an order for reinstatement or re-engagement available.

Practical Steps for Hirers and Agencies

• Ensure agency workers receive equal treatment from day one. Identify the correct comparator, confirm what basic working and employment conditions direct employees in the same role are in receipt of, and ensure equality between agency workers and their direct comparators.
• Review agency agreements for anti-poaching or fee clauses that could contravene sections 12 and 13 of the 2012 Act.
• Confirm that any agencies used by the employer hold a current WRC licence.
• Provide agencies with accurate information on comparator terms and conditions.
• Apply fair procedures in any disciplinary or dismissal process, preserve relevant records once a dispute is in contemplation, and ensure no retaliation against workers asserting their rights.

How the Maples Group Can Help

The Maples Group’s Dublin Employment team regularly advises hirers and employment agencies on all aspects of agency worker law, including structuring agency arrangements, ensuring compliance with equal treatment obligations, managing transitions from agency to direct employment, and defending WRC complaints.

If you have any questions on the matters discussed in this update, please contact a member of our team.