Legal Considerations for Engaging Agency Staff

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Table of Contents

• Agreements With Agency Staff
• Dismissing Workers
• Paying Agency Staff
• Key Takeaways
• Frequently Asked Questions

Hiring temporary staff through an agency has many benefits. Not only can agency staff help you reduce the burden of interviewing and vetting staff, but temporary agency staff can help minimise your employees’ workload during busy periods. Further, you can also use temporary staff to complete highly specialised work that none of your permanent employees can do.

Despite the benefits of hiring agency staff, there are some risks to consider. Some of these risks relate to your rights and obligations as an employer of agency staff. This article will take you through three legal considerations when hiring agency staff to help you better understand your role as an employer.

Agreements With Agency Staff

When engaging workers through an agency, you should first consider the recruitment services you use. There are two main elements to engaging agency staff. Firstly, there will be an agreement between you and the agency. Secondly, the agency will have its own agreement with the staff member. 

When evaluating the agreement between you and the agency, it is important to know what terms to look out for. Firstly, you should consider if the agency has a replacement guarantee, which requires the agency to substitute an agency staff with a new candidate if the initial candidate is deemed unsuitable. It is also important to consider exactly what services the agency’s fee structure includes.

Dismissing Workers

When engaging workers through an agency, you should consider your rights to terminate the contract if they are not performing. Since the employment agency (rather than your business) employ agency staff directly, the agency staff has no contract with you as an employer. As such, agency staff cannot usually make an unfair dismissal claim against you.

Despite this, some provisions might allow the agency staff to pursue an unfair dismissal claim against the hiring agency. However, most agency staff are casual employees. Therefore, they will have the same benefits and limitations as casual employees, including a lack of notice of termination. Exceptions include if they have been in employment for a certain amount of time or on a regular basis for an extended period. 

Ultimately, you may be able to cease engaging an agency worker if you are dissatisfied with their work, notwithstanding any terms in your agreement with the agency.

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Paying Agency Staff

Before engaging agency staff, it is also essential that you consider how you will pay agency staff. In most cases, you will pay the agency directly, who is responsible for their payroll. Hence, the agency is typically responsible for paying staff wages, including their superannuation and tax contributions. 

Key Takeaways

Engaging temporary staff through an agency has several benefits, such as reducing your workload. However, there are also some risks to consider relating to your employer’s rights and obligations. Before hiring agency staff, you should consider:

• the terms in the agreement between you and the agency;
• your ability to dismiss agency staff;
• payment of agency staff wages; and
• minimum entitlements owed to agency staff.

If you need assistance understanding your rights and obligations when hiring agency staff, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions