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Temporary Workers Contract UK: Agency Terms (2025)

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Part ofUK Employment Law Guide for Employers (2025)

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
Temporary agency work sits at the heart of how thousands of UK businesses fill short-term gaps, manage seasonal peaks, and trial candidates before making longer commitments. But the legal relationship between a temp, the employment business placing them, and the end client is genuinely complex, and getting the paperwork wrong can expose agencies to claims, pay disputes, and regulatory trouble. A well-drafted Temporary Workers Contract sets out the engagement terms clearly so everyone knows where they stand from day one. This page walks through what the contract does, how it fits alongside the Agency Workers Regulations 2010 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003, and the practical points you need to get right before any worker accepts an assignment. It is written for agency owners, HR managers, and anyone running a temp desk who wants to understand the framework properly.

What this document is

A Temporary Workers Contract is the written agreement between an employment business (the agency) and a temporary worker it sends out on assignments to end clients. It is not a contract with the client. The client relationship sits in a separate Terms of Business document, and the specifics of each placement are usually captured in a short assignment confirmation or booking form that references the main contract.

This type of contract is built for individual workers engaged directly by the employment business. It is not designed for contractors operating through their own personal service company, nor for workers paid through a third-party umbrella arrangement, both of which need a different contractual structure.

The contract typically sets out how assignments will be offered and accepted, how pay and holiday work, the worker's obligations during assignments, conduct standards, confidentiality, and what happens when an assignment ends. It also needs to reflect the statutory rights that apply to agency workers under UK law, including equal treatment after a qualifying period.

How to use this document

  1. Confirm the engagement model. Before drafting anything, decide whether the worker is engaged directly by the employment business on a worker basis, via their own limited company, or through an umbrella. This contract fits the first category only. If you are placing contractors through intermediaries, you need a different agreement and should also factor in off-payroll working rules where relevant.
  2. Set out how assignments are offered and accepted. The contract should explain that the employment business has no obligation to offer work and the worker has no obligation to accept it. Each assignment is a separate engagement with its own start date, location, hours, hourly rate, and expected duration, usually confirmed in writing in a short booking form before the worker starts.
  3. Address pay, holiday, and the 12-week equal treatment rule. Under the Agency Workers Regulations 2010, after 12 continuous calendar weeks in the same role with the same hirer, the worker becomes entitled to the same basic terms as a comparable direct recruit, including pay, working time, and annual leave. Your contract should make clear how this will be applied in practice.
  4. Cover conduct, confidentiality, and client property. Include obligations around timekeeping, following reasonable client instructions, health and safety, returning equipment, and keeping client information confidential. Set out what happens if a worker leaves an assignment early, behaves in a way that damages the client relationship, or is asked to leave by the hirer mid-assignment.
  5. Deal with transfer fees, termination, and data protection. If the client wants to hire the worker directly or engage them through another agency, the Conduct Regulations 2003 give the client the right to an extended hire period as an alternative to paying a transfer fee. Spell this out honestly. Finish with clear termination provisions and a UK GDPR-compliant data clause.

Common questions

If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £89.

Common questions

Q Does this contract make the temp an employee of the agency?
Usually not. Most temporary workers engaged this way are classed as workers rather than employees, which gives them rights to the national minimum wage, paid holiday, and protection from unlawful deductions, but not full employee rights such as unfair dismissal protection or statutory redundancy pay. The exact status depends on the working arrangement in practice, not just the contract wording, so it is worth being careful about how assignments actually run.
Q What happens after the 12-week qualifying period under AWR?
Once a temporary worker has completed 12 continuous calendar weeks in the same role with the same hirer, they become entitled to the same basic working and employment conditions as someone recruited directly by the client. That covers pay, duration of working time, night work, rest periods, rest breaks, and annual leave. The clock can pause in certain situations, for example short breaks, and resets if the role genuinely changes.
Q Is the Swedish Derogation still available?
No. The Swedish Derogation, which previously allowed agencies to avoid pay parity by offering pay between assignments, was abolished in April 2020. Any contract you use today should not rely on it. If you are reviewing older template agreements, check carefully that derogation clauses have been removed, because relying on an out-of-date provision will not protect you from equal treatment claims.
Q Do I need a separate document for each assignment?
It is good practice. The main contract sets out the overall framework, and a short assignment or booking form confirms the specifics for each placement, including the client, location, rate, hours, and expected length. This gives both sides a clear record of what was agreed for that particular job and makes it much easier to deal with disputes about pay, duration, or scope later on.
Q Can the client hire the temp directly without paying a fee?
Under the Conduct Regulations 2003, the agency can charge a transfer fee if the client hires the worker directly within a set period, but the client must be offered the alternative of an extended hire period instead of paying the fee. Any transfer fee also has to be reasonable. If your contract ignores this or buries it, the fee clause may be unenforceable, so draft it carefully.
Q Does this contract work for umbrella company arrangements?
No. Where a worker is paid through an umbrella company, the umbrella is the worker's employer and the contractual chain is different. You would typically have a contract between the agency and the umbrella, and a separate employment contract between the umbrella and the worker. Using a direct temp worker contract in an umbrella situation creates confusion about who the real employer is and can cause tax and status problems.
Q What records should the agency keep?
Keep signed copies of the main contract, every assignment confirmation, timesheets, pay records, right to work checks, and any communications about conduct or performance issues. The Conduct Regulations 2003 set out specific information the employment business must obtain and provide before a worker starts. Good records protect you if there is ever a dispute with the worker, the client, or HMRC, and they make AWR compliance far easier to evidence.
If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £89.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.