awr glossary


The AWR is already a complicated piece of legislation so we thought we would make it a little less daunting by defining some of the more common terms you're likely to come across:

Agency worker - An agency worker is someone that is supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer; and also has a contract of employment with the temporary work agency. Contractors operating via an umbrella company will also be classified as being an 'agency worker'.

Contractors operating via their own Limited company working in a business to business capacity will not be deemed as an agency worker and will be exempt from the agency worker regulations.

Temporary work agency - In these Regulations “temporary work agency” means a person engaged in the economic activity of supplying individuals to work temporarily for and under the supervision and direction of hirers; or, paying for, or receiving or forwarding payment for, the services of individuals who are supplied to work temporarily for and under the supervision and direction of hirers. This definition means umbrella companies are included too.

Qualifying period - An agency worker will be entitled to the same basic working and employment conditions as a comparable permanent employee.

Employment rights from day 1 - An agency worker will be entitled to access the same facilities and information on job vacancies as coparable permanent employees (e.g. staff canteen, car parking and child care facilities).

Employment rights After 12 weeks - the temporary agency worker would be entitled to the same working and employment conditions as that of a comparable employee. These are;
- Equal Pay
- The same commissions, bonuses and over time rates
- Annual leave
- Night work
- Rest periods and breaks

Comparable employee - A comparable employee is someone that is already working in full time employment for the hirer. They are also known as a permanent equivalent to the agency worker. The comparable employee will be engaged in doing the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification and skills.

If you would like any more clarification on any other terms, feel free to email us at

Substantively different role - The guidance states that there has to be a genuine and real difference to the role. The temporary worker agency must provide a description of the new role in writing to the agency worker. It is also recommended that the temporary worker agency notifies the agency worker that their role is substantively different and a new qualifying period will apply.

Pay - After the 12 week qualifying period the agency worker will be entitled to equal pay. Pay includes:
- basic Pay
- overtime payments
- shift/unsocial hours allowances
- payment for annual leave (above statutory)
- bonus or commission payments directly attributable to amount or quality of work done
- additional discretionary, non-contractual payments
- vouchers/stamps with monetary value

Pay excludes the following:

- occupational: sick pay; pensions; maternity and paternity pay
- redundancy or notice pay
- payment for time off for trade union duties
- advances in pay, or loans
- expenses
- the majority of benefits in kind

Swedish Derogation - Agency workers operating through umbrella companies will fall within the agency workers regulations, unless the umbrella company provides pay between the agency workers assignments (See Regulation 10 of the Regulations). The term used for this is "Swedish Derogation".

More on Danbro operating "Swedish Derogation"...
If the agency worker is issued with a permanent contract of employment with either the agency or the umbrella company and regulations 10 and 11 are met, the agency workers regulations will not apply to the individual.

Under a permanent contract of employment, the TWA (umbrella company) must attempt to find suitable work for the individual and pay the worker a minimum amount. The minimum amount is 50% of the basic pay that they received (based on the highest level of pay) within the last 12 weeks of their assignment. The payment must not be less than minimum wage and should be for a period of up to 4 weeks in any 12 month period.
The legislation gives an example of a 1 hour contract and so we are intending to fund this payment, being 50% of 1 hour per week for a maximum of 4 weeks in any 12 month period.

NB: We are still waiting for concrete confirmation from the Department of Business Innovation & Skills (BIS) who are currently reviewing this.