Agency Workers Have No Right to Apply for Vacant Permanent Positions

Agency workers have a right to be informed by those who hire them of permanent positions that become vacant – but are they also entitled to apply for such posts? Following an important test case, the Court of Appeal has answered that question decisively in the negative.

The case concerned a worker who was employed by an agency that was owned by, and provided staff exclusively to, Royal Mail in order to enable the latter to react to fluctuations in demand for labour. When permanent positions became available at the sorting office where he worked, they were posted on a notice board.

He and other agency workers were not eligible to seek appointment to such posts, although they could, in open competition with other applicants, apply for externally advertised vacancies. Royal Mail wished to fill vacancies without increasing employee headcount and the seniority system it operated enabled those with longer service to seek out more genial posts without external competition.

The worker’s arguments that the system breached the requirements of the Agency Workers Regulations 2010 succeeded before an Employment Tribunal on the basis that agency workers’ express right to receive information concerning vacancies for permanent positions implicitly extended to a right to apply for such positions. That decision was later reversed by the Employment Appeal Tribunal (EAT), however.

Challenging that outcome, the worker argued that the EAT’s interpretation of the Regulations was too narrow and undermined the purpose of conferring on agency workers an equal opportunity to find permanent employment with hirers. In the absence of a right to apply for permanent positions, an entitlement to receive information about them was rendered sterile and meaningless.

Dismissing the appeal, however, the Court noted that the purpose of the Regulations was to effect a pragmatic compromise, balancing the rights of agency workers and their desire for greater security against employers’ need for flexibility. The principle of non-discrimination that the Regulations espoused was not without qualification or caveat and there was no basis on which a right to apply for vacant positions, as well as to receive information about them, could be implied.

The Court noted that the Regulations, and the EU directive on which they are based, prohibit less favourable treatment of agency workers, as compared to direct hires, in relation to pay and other matters. However, if the worker’s interpretation were correct, employers would be precluded from addressing peaks and troughs in demand for labour. The ability to offer variable hours of work for agency workers and labour market flexibility would thereby be substantially reduced.

The Court noted that it would be very surprising if the directive went so far as to impose a positive obligation on employers to give equal treatment to agency workers in relation to applying for, and being considered for, vacant positions, especially where it made no express mention of such a valuable right. It would equally be very odd if employers were unable to give preference to in-house candidates when a vacancy arises. That was very common practice and was generally thought to be a beneficial one in that it was believed to reward employee loyalty and promote workplace morale.