Labour Supply Agreement Template for England and Wales

A Labour Supply Agreement is a crucial legal document that governs the relationship between businesses that supply temporary workers and companies that hire them. Under England and Wales law, this agreement ensures all parties comply with complex employment regulations while providing clarity on responsibilities, payments, and worker rights.

When do you need this document?

You need a Labour Supply Agreement when your business either supplies workers to other companies or regularly hires temporary staff through agencies. This is essential in construction, manufacturing, hospitality, and healthcare sectors where workforce demands fluctuate seasonally or project-based. The agreement becomes legally necessary when you're operating as an employment business under the Conduct of Employment Agencies and Employment Businesses Regulations 2003, or when you need to ensure compliance with the Agency Workers Regulations 2010 that grant equal treatment rights to temporary workers after 12 weeks in the same role.

Key legal considerations

Your Labour Supply Agreement must clearly define the employment status of supplied workers and specify which party holds employer responsibilities. This includes determining who handles PAYE, National Insurance contributions, and statutory payments under the Employment Rights Act 1996. The agreement should address the Agency Workers Regulations 2010 requirements, particularly the equal treatment provisions that apply after the 12-week qualifying period. Insurance provisions are critical, including employer's liability insurance and public liability coverage. You must also include terms covering the Working Time Regulations 1998 compliance, ensuring proper management of working hours, rest breaks, and holiday entitlements. Termination clauses should specify notice periods and circumstances for ending the agreement, while confidentiality provisions protect sensitive business information.

Legal requirements in England and Wales

Under England and Wales law, your Labour Supply Agreement must comply with several key legislative requirements. The Employment Rights Act 1996 mandates that workers receive proper contracts, statutory sick pay, and protection against unfair treatment. The National Minimum Wage Act 1998 requires that all supplied workers receive at least the statutory minimum wage, with clear responsibility allocation between parties. The Equality Act 2010 compliance is essential, ensuring no discrimination occurs based on protected characteristics during worker selection or treatment. You must also adhere to the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which regulate fee structures, contract terms, and professional conduct standards. The agreement should specify compliance with the Gangmasters (Licensing) Act 2004 if operating in agriculture, horticulture, food processing, or shellfish gathering sectors, as these require specific licensing. Health and safety obligations under the Health and Safety at Work Act 1974 must be clearly allocated between the supply company and client, ensuring worker protection and regulatory compliance.