Do you understand the full risk of agency workers?

The use of contractors in your supply chain could open you up to unexpected issues, as Yvonne Gallagher reports

Picture the scene: a multiple car pile-up is caused by a driver falling asleep at the wheel. An investigation reveals the driver and his passengers were workers supplied by an agency in Scotland, where they all live, to carry out work in the south of England. Every week they were required to start at 9am on Monday morning and work until close of business on Friday. They would drive overnight on Sunday night/Monday morning, going straight into a day’s work. When the accident happened, they were driving through the night on Friday to get home after their week’s work.
 
The work they carry out is skilled work in a safety critical industry, or requires them to work at height or with hazardous substances, so there is scope for real danger to themselves and others if they are not alert and properly rested. The end-user client is a household name, with a trusted brand and a valued reputation for safety. The potential fallout for the business could be severe, and arises in several ways.
 

Supply chain issues

Typically, the business – let’s call it Safe as Houses Ltd – will, over the years, have outsourced several specialist functions, relying on the supply of expert workers by other providers. The agencies they deal with are well paid for their work, as are the individuals, and the contracts provide for compliance with all applicable legislation. How has it gone so wrong? 
 
The Modern Slavery Act has focused attention on risks arising from the use of cheap overseas labour and child labour in unacceptable surroundings. The obligation to carry out due diligence in the use of external suppliers and to report on steps taken has undoubtedly led to improvements in practice. What has attracted less attention is the need for vigilance and visibility of the working arrangements of UK-based individuals in skilled and well-paid functions, where pay rates and conditions may at first glance appear to be less of a concern. 
 
The Working Time Regulations, which govern limits on weekly working hours and provide a right to annual leave, require breaks between the end of one working day and the start of the next (a minimum of 11 hours) and for individuals to have 24 hours off in every seven days, or 48 hours in every 14 days. 
 
If an individual appears to be working a five-day week, but is actually undertaking a full day or night of travel instead, on what is being treated as a rest day, there may be arguments as to whether their time should be considered working time. A normal home-to-work commute is not considered to be working time, and the usual view will be that working time starts at the point an individual arrives at their place of work. Where individuals are directed by the company employing or supplying them to travel elsewhere, however, it is possible they will be able to argue they are working during that time and the regime for breaks applies. At the very least, a structure is being imposed here which builds in lengthy travel obligations.
 
Liability for compliance with the regulations will lie with the contracting supplier, but Safe as Houses Ltd will be in the spotlight when problems arise, so must ensure safe arrangements are in place. 
 
It is not uncommon for businesses to find that rate increases agreed with a supplier are not passed on to those carrying out the work, or that expenses paid to enable individuals to have reasonable accommodation when they are away from home is saved by them, in favour of cheaper accommodation. These factors can increase risk. It is only prudent to manage these aspects of the supply chain.
 
Politically, outsourcing arrangements can face criticism, and employers who use such arrangements should keep in mind that any perceived abuse may be used to generate adverse publicity. Should such a situation arise, managing issues quickly and effectively requires that those charged with responding understand what arrangements are in place and how they operate in practice, so they can speedily challenge or deflect any misconceived reporting.
 
In addition to the human cost of such incidents outlined above, there is significant reputational risk to both the agency and Safe as Houses. Bad press, an inquest and ensuing legal action from the families affected all have the potential to cause serious reputation damage. 
 
Accidents will happen, but companies and all those involved in the supply chain should do all they can to minimise risks. A regular audit of the supply chain, at all stages, is a good start to making sure that all that can be done, is being done.
 
Yvonne Gallagher is an employment partner at Harbottle and Lewis