Under the Agency Workers Regulations (AWR) due to come into force during 2011, an agency worker is entitled after 12 weeks in post to the same basic working and employment conditions as he would have received for doing the same job had he been recruited directly by the end user.

However, those staffing companies and employers in the creative and media industry face particular pitfalls. The problem for the creative and media industry lies in the means by which comparability between an employee and an agency worker is either established or discounted, given the lack of objective standards by which ability can be measured in this sector.

Making the difference

The key issue here is not whether an agency worker is paid less than an employee, but rather whether the end user would have paid the agency worker more if he was employed directly. The end user must be able to show clear reasons for the lower salary compared to others performing the same role. This is not as easy as it sounds in an arena where a person’s monetary value to his employer depends so much on intangibles - track record, market forces, specialist skills shortage, client relationships, industry “name”, etc.

To be prepared for these regulations in October 2011, an employer within the creative and media industry should begin now the process of determining what criteria it values in remuneration terms, so that it is able to rebut equal treatment claims.

Reviewed below are some examples of criteria that employers in the creative and media industries in particular may seek to rely on to rebut “comparability”:

• Reputation – “brand name” and reputation in the industry are key factors when deciding upon employees’ pay levels, for their potential to assist with future account wins. But “name” is intangible and hard to prove one way or the other. It is also transient and needs constant “refreshment” if it is to remain a reliable reason for a difference in pay.
• Value of client relationships – particularly for an account manager, an employee’s client followings have a value in his remuneration. The ability to show that an otherwise comparable permanent employee has some additional worth of this sort could readily form a distinction between him and his agency equivalent, provided that the employer is able to prove the existence of the relationships relied upon.
• Restrictions from working for clients or competitors – given that relationships are key in this industry, employers are likely to put a significant value upon the ability to restrict their employees contractually from working with competitors or clients after they leave. Broadly speaking, an employment business is less able to restrict an agency worker in this way following the end of an assignment, and so Employment Tribunals are likely to agree that this future restriction upon an employee’s earning capacity would be worth some recognition in his remuneration package.

Proving the difference

Employers and employment businesses will clearly need to provide some form of proof that these are legitimate reasons for a difference in pay. The best form of defence is the maintenance of a comprehensive set of notes of its considerations in this respect (backed up by contemporaneous written evidence of the employee’s reputation, skills, etc).

In addition, job titles and descriptions for senior staff could be amended to create a visible gap between them and other staff, while appraisal and remuneration committee documentation could be amended so as to give visible importance to the reputation and relationship questions (supported by client feedback where possible).