Employers are being warned they could face large fines and unlimited compensation awards if they breach the new regulations on agency workers.

City lawyers say the regulations, effective from 1st October, will put extra pressure on companies that need to recruit staff on short term contracts to cover holiday periods or meet surges in demand.

Sally Laughton of Andersons Solicitors in Nottingham, says that temporary workers who fulfil the same role with a firm for 12 continuous weeks will now be entitled to the same employment conditions as employees.

The regulations apply even if the person only works for a few hours each week.

From the first day in a temporary role, agency workers must be given access to any collective on-site facilities which are available to comparable employees. These facilities include staff canteens, childcare, parking and transport.

Once the 12-week period is complete, the employer must also give more equal treatment entitlements including salary, overtime pay, shift allowances, bonuses, lunch vouchers and annual leave.

Sally said: "Employers will need to tread carefully because if temporary workers are employed beyond 12 weeks they will acquire new rights which may prove costly.

"On the other hand, employers could face stiff penalties if they try to get round the regulations. For example, repeatedly hiring workers for just 11 weeks could result in fines of up £5,000 per worker.

"Employers should also be aware that there is no limit to the amount of compensation a tribunal can award for breaches of the regulations."

For more information please contact Sally Laughton, Partner - Employment Department on 0115 947 0641 or email slaughton@andersonssolicitors.co.uk.