joint-employment

What is joint employment?

As an agency worker you may have heard of the term ‘joint employment’.

But what exactly is joint employment, and how can it affect you as an agency worker?

When we talk about joint employment, what we’re typically referring to is when an agency and an umbrella company (or other provider) work together as joint employers of the agency worker.

Joint employment in the UK was originally intended to bridge the gap when a business takes over another business, and during the transfer process employees could have joint employers.  

In the context of agency workers, a joint employment arrangement will mean that you have two employers who share responsibility (and risk) for your employment. 

But what does that mean in practice?

What does joint employment mean for me as an agency worker?

There is a lot of detail to get right for joint employment, so transparency is essential – and each of your joint employer’s Key Information Documents should clearly state which roles each employer will undertake.  

Your employers need to agree how to divide all HR scenarios between them, such as management of holidays, sickness absence, maternity or adoption or paternity leave, and other extended leave periods, disciplinary and grievance procedures and appraisals.  

Potential issues for the joint employers might be:

  • Deciding who the employee would raise any grievances with;
  • management of disciplinary processes and making decisions on the same;
  • clarity regarding who is the ultimate decision-maker (e.g. what if one employer wanted to dismiss but the other did not); 
  • the potential of employment tribunal claims being brought against both employers, although the dispute is only with one
  • whether an indemnity should be included where wrongdoing is only by one employer. 

Where one employer acts as the paymaster and pays the worker’s salary, NICs and pension contributions etc., the reimbursement of the share of those costs by the other employer is not subject to VAT.  

This VAT exemption has a significant impact on cashflow through the supply chain, and can be a significant reason for joint employment being considered. 

An advantage of joint employment for agency workers is the closer collaboration between the agency and the umbrella company, and the clarity regarding the worker’s rights.   

The differences an agency worker will see

That latter point is the main benefit of a joint employment arrangement between entities in the supply chain.  

You may be wondering how joint employment will be beneficial to you as an agency worker, in comparison to say being (wholly) employed by an umbrella, or being an agency worker paid via the agency’s payroll.  

We advise that you get as much information as possible from your agency what their joint employment policy and benefits are before you sign up with them, and discover as much information as possible before committing to a contractual agreement.

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