The Minister has now published the Bill to give effect to the Temporary Agency Workers Directive and we will shortly circulate an email in relation to the Bill. The Minister has also confirmed that the Bill will be effective from the 5th December 2011 with enactment of legislation expected in early 2012.

The retrospective nature of the Temporary Agency Workers legislation has caused surprise, and no level of confusion. This was an unexpected development. From a legal perspective, retrospective legislation raises constitutional issues and this will have to be looked at in more detail now that the Bill has been published.

In this article we aim to provide practical advice to agencies and client companies on the legal steps that can be taken now to prepare for the enactment of the Bill in the early part of 2012.

Firstly, and most importantly, the Minister has published a frequently asked questions document (“FAQ’s”) on this issue on the Department website, www.djei.ie.

All HR practitioners, agencies and client companies alike should familiarise themselves with the FAQ’s. Most importantly, the FAQ’s sets out what will be included in the definition of pay and sets out that the list is an exhaustive list which will be included in the Bill. Everything that is excluded from this list will be excluded from the definition of pay. Furthermore, the FAQs set out the definition of basic working and employment conditions, which list is again likely to be reflected in the draft legislation.

The FAQs also confirms that self employed persons, those employed under managed service contracts and agency workers paid between assignments by their agency will also be excluded from the scope of the legislation.

In anticipation of the retrospective nature of the legislation, leaving aside any constitutional questions that may arise once the Bill is published, there are certain steps that agencies and client companies should now be taking to prepare themselves for the legislation and also to limit their potential liability under the legislation. These steps are as follows:


1. Advice for agencies

Agencies should urgently review their contract documentation with their end user clients. Agencies should now look at drafting indemnities/warranties for that contractual documentation, which can be included now in anticipation of the legislation and amended once the legislation is enacted if necessary. Agencies will need to include an obligation on the end user clients to provide information about pay and basic working conditions to the agency in order that the agency can ensure that its temporary workers are being paid in accordance with these elements as and from the 5th December 2011.

Agencies should seek information from their client companies in writing in relation to what the client company would be paying the agency worker had they been recruited directly. The request should be documented and retained on file and should the information not be forthcoming, the agency should take reasonable steps to follow up and obtain the information from the client. Such documentation may be necessary to limit an employment agency’s liability under retrospective legislation.

Agencies should also look at information they will be required to furnish to the client companies about how individual agency workers are retained by them as end user clients will need this information in order that they can determine who exactly in their organisation is caught by the provisions of the legislation once it is enacted.


2. Advice for client companies

Client companies should equally review their contractual documentation with the agency and may also seek indemnities and warranties from the agency in respect of how agency workers are retained by the agency. Client companies should also seek information from the agencies about how individual agency workers are retained (i.e. are they retained through a limited liability company or otherwise) as this information will enable the client to determine who in their organisation is caught by the legislation once enacted.

Client companies should undertake an immediate workforce audit in order that they can group workers together and determine who exactly is caught by the legislation. Client companies then need to give consideration to what those agency workers would be paid by the client company had they been recruited directly as and from the 5th December 2011. This information, where appropriate, will need to be furnished to the agency in relation to the specific workers caught by the definition of agency worker as per the FAQ’s on the Department website as outlined above.

End user organisations also need to give consideration to whom in their organisation has responsibility for liaising with the agencies and coordinating the flow of information to ensure the organisation is legally protected in so far as practicable.

Agencies and end user companies alike should obtain assistance from their legal advisors in drafting the appropriate indemnities and warranties that can now be inserted into contractual documentation and amended, if necessary, once the legislation is enacted. However, it is important for agencies and end user companies alike to take steps now to limit their liability under legislation that is expected to be retrospective.