Election for extended hire period for agency worker

As an alternative to paying a transfer fee where you want to directly employ a temporary agency worker, you can instead opt for an extended hire period.

Statutory provisions

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 state that transfer fees can’t be enforced against you unless the contract between the temporary agency (called an “employment business”) and you expressly provides that, instead of paying the transfer fee, you can by notice to the employment business elect for an “extended hire period”, of such length as is specified in that contract. After the extended hire period, the temp will then transfer to your employment with no transfer fee payable. The fee is also unenforceable (and so you will be free to directly employ the worker) if the employment business doesn’t then supply the worker to you for the duration of the agreed extended hire period, unless they’re “in no way at fault”.

Extended hire period

There’s no statutory minimum or maximum limit on the length of the extended hire period, so each employment business can set their own duration. This can range from as little as six weeks to as much as one year. Therefore, seek to negotiate down the length of the extended hire period as soon as you receive the employment business’ terms and conditions.

Election notice

Where you do wish to elect for an extended hire period rather than paying a transfer fee, use our Election for Extended Hire Period for Agency Worker to formally give written notice to the employment business. Our letter sets out that you’ve offered the temp a permanent role, refers to the extended hire period clause in the contract (and how long that period is) and then gives notice that you’re exercising this option with immediate effect. As a result, it confirms that you’ll now continue to engage the worker for the duration of the extended hire period, after which they’ll be free to commence permanent employment with you, with no liability on your part to pay any transfer fee.

No less favourable terms

Once you’ve notified the employment business that you’ve opted to continue hiring the temp for the duration of the extended hire period, it must continue to supply that same worker to you for the entirety of this period on terms no less favourable to you than those which applied immediately before you gave notice. This prevents the employment business from imposing punitive terms on you during the extended hire period.

Disadvantage

The key disadvantage of this alternative option to paying the transfer fee is that it will prolong the process of the temp becoming your permanent employee. If you don’t want to pay the transfer fee or use the extended hire period, you must stop using them and wait for a “quarantine period” to end before you can employ them directly.