Nearly a million people in the UK go to work each day through an employment agency. On paper, they have rights. The Agency Workers Regulations 2010 entitle them to equal basic pay and working conditions after twelve weeks in the same role. The Swedish derogation — the loophole that once allowed agencies to pay workers less between assignments — was repealed in 2020. The law, we are told, protects them.
But the real story of agency work in the UK is not about rights on paper. It is about what happens when employers are allowed to control workers without ever having to manage them. Agency staffing is not just a flexible hiring tool. It is a management avoidance strategy. And it is failing workers.
The Twelve-Week Illusion: How UK Agency Workers Lose Equal Pay
The twelve-week qualifying period for equal pay is not a floor. It is a management tool. An agency worker can be moved, re-assigned, or simply let go before the clock runs out, resetting the entitlement and keeping them on lower pay indefinitely. The TUC has documented how employers deliberately structure assignments to prevent workers from completing the qualifying period. The anti-avoidance provisions in the Regulations are supposed to stop this, but enforcement is so weak that the practice continues largely unchecked.
Even when the twelve weeks are completed, the law only bites if there is a "comparable employee" to measure against. Employment tribunals have found this definition notoriously difficult to apply. An agency worker on a short-term or zero-hours contract often has no clear comparator at all. Without a directly employed person doing the same job on the same site, the right to equal pay is legally hollow.
The result is a pay penalty that persists despite the regulations. TUC research found agency workers paid an average of 22p less per hour than their non-agency counterparts — equivalent to around £430 a year for those working full time through agencies. In some workplaces, the TUC discovered agency workers were paid up to £135 less a week than permanent staff doing the same job. The GMB has reported agency workers at an M&S distribution depot near Swindon being paid minimum wage while directly employed staff received £2 more per hour for the same work.
This is not an accident. It is a management choice. The twelve-week period tells agency workers that their rights are contingent on their usefulness to the client — and that those rights can be reset at any time. It allows managers to avoid offering permanent contracts, avoid investing in training, and avoid treating agency staff as part of the team. Why bother managing people properly when you can just replace them?
The Human Cost: Sports Direct, JD Sports, and M&S Agency Exploitation
The structural weaknesses of the agency model are not abstract. They have names and faces.
At Sports Direct's Shirebrook warehouse, over three-quarters of staff were agency workers, despite the company promising in 2016 to increase the proportion on permanent contracts. The Business, Innovation and Skills Committee heard evidence that agency workers feared reprisal if they challenged supervisors or reported safety concerns. The fear of losing an assignment was more powerful than any legal right. That is not management. That is intimidation.
At JD Sports, an undercover investigation found warehouse working conditions described as "worse than prison." Agency recruits were on zero-hour contracts with no guarantee of work, could be dismissed with no notice, and were paid the minimum wage. Managers did not have to deal with grievances, performance issues, or requests for better conditions. They simply called the agency and asked for someone else.
At an M&S distribution depot near Swindon, the GMB exposed a complex system of subcontracting in which agency workers were paid minimum wage while directly employed staff received £2 more per hour for the same work. The two-tier workforce was not an accident. It was the point.
These are not isolated cases. They are the predictable outcome of a system that treats workers as disposable and managers as unaccountable.
The Management That Isn't: How Labour Hire Avoids Accountability
Good management is hard. It means training people, giving feedback, resolving conflicts, investing in skills, and treating workers with dignity. The agency model lets managers skip all of that. If a worker struggles, asks questions, or speaks up, the manager can simply ask the agency for a replacement. No performance review. No appeal. No union representative. No severance. No explanation.
This is not management. It is disposal.
And it is made easier by the legal framework. The Agency Workers Regulations 2010 were supposed to create parity, but they contain enough flexibility to allow employers to maintain a two-tier workforce indefinitely. The twelve-week qualifying period is a management tool, not a worker protection. It tells agency workers that their rights are contingent on their usefulness to the client — and that those rights can be reset at any time.
The Employment Rights Act 2025 introduces new rights for agency workers, including a right to guaranteed hours after a reference period and a right to reasonable notice of shifts. These are welcome steps. But they will be meaningless without enforcement. A right without a remedy is not a right. It is a promise.
Agency work can be a legitimate bridge for some workers. But it should not be a permanent underclass. It should not be a legal shield for bad bosses. It should not allow a company to profit from a worker's labour while denying that worker a fair share of rights, security, and respect.
Workers are not commodities to be rented and returned. If a company controls the work, it should be responsible for the worker. Until that principle is enforced, agency staffing will remain what it too often is today: a loophole for poor people management — and a roadblock to workers' rights in the UK.