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08 / 3 / 2011 4pm

Temporary work agencies (TWA)

The Regulations apply to individuals who have a contract with a temporary work agency and who are supplied by that agency to work temporarily under the supervision and direction of a ‘hirer’- the client.

A temporary work agency is an organisation that is in the business of supplying individuals to work temporarily for hirers, whether for profit or not and including both public and private sector bodies involved in the supply of temporary agency workers.

This could be a “high street” agency, but also an intermediary such as an umbrella company or a master/neutral vendor if they are involved in the supply of the agency worker.   

An individual is not prevented from being an agency worker under the regulations simply because they work through an intermediary body.  For example, an individual working through an umbrella company, who finds work via a TWA, is covered by the Regulations.  

The individual will usually have an overarching employment contract with the umbrella company with full employment rights and all of the employee’s income is treated as employment income.

Sometimes the supply of agency workers is managed on behalf of a hirer by a master vendor or neutral vendor that may or may not engage and supply workers directly or indirectly.

These arrangements exist where a hirer appoints one agency (the master vendor) to manage its recruitment process, using other recruitment agencies as necessary (“second tier” suppliers) or appoints a management company (neutral vendor) which normally does not supply any workers directly but manages the overall recruitment process and supplies temporary agency workers through others.

Master or neutral vendors fall within the legal definition of TWA in view of their involvement in the supply of individuals and/or their role in forwarding payments to such individuals.


Key point
Supervision and direction of a worker by the hirer is a key point in that it is this element that defines a Temporary Work Agency and an individual, an agency worker. 

This means that if an individual accepts direct instruction in relation to their work not by the hirer but by their employer, they will fall outside the scope of the Regulations. 

Accordingly, genuine outsourcing arrangements are not affected by the Regulations because the contractor’s personnel are not subject to supervision by the host organisation.

The Agency Worker

An agency worker is someone who has a contract with the TWA – an employment contract or an agreement to provide services personally- but works temporarily for and under the direction and supervision of a hirer.

The unique, tripartite relationship between agency worker, agency and hirer is a key feature of these Regulations and who is covered by them.

The key elements required for someone to be an agency worker are:

  • there is a contract (an employment contract or an agreement to provide services personally) between the worker and a TWA
  • that worker is temporarily supplied to a hirer by the TWA
  • when working on assignment the worker is subject to the supervision and direction of that hirer. 


  • the worker in question is not working for a hirer in a situation where that hirer is a client or customer of the individual.


Those who are likely to be outside the scope of the regulations include:

  • individuals who find work through a temporary work agency but are in business on their own account
  • individuals working on Managed Service Contracts where the worker does not work under the direction and supervision of the hirer
  • individuals working for in-house temporary staffing banks where a company employs its temporary workers directly and they are only supplied to work for that same business or service
  • individuals who find direct employment with an employer through an “employment agency”
  • individuals on secondment or loan from one organisation to another.

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