pay between assignments contracts

assignments basic law

Assignments: The Basic Law

The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.

As with many terms commonly used, people are familiar with the term but often are not aware or fully aware of what the terms entail. The concept of assignment of rights and obligations is one of those simple concepts with wide ranging ramifications in the contractual and business context and the law imposes severe restrictions on the validity and effect of assignment in many instances. Clear contractual provisions concerning assignments and rights should be in every document and structure created and this article will outline why such drafting is essential for the creation of appropriate and effective contracts and structures.

The reader should first read the article on Limited Liability Entities in the United States and Contracts since the information in those articles will be assumed in this article.

Basic Definitions and Concepts:

An assignment is the transfer of rights held by one party called the “assignor” to another party called the “assignee.” The legal nature of the assignment and the contractual terms of the agreement between the parties determines some additional rights and liabilities that accompany the assignment. The assignment of rights under a contract usually completely transfers the rights to the assignee to receive the benefits accruing under the contract. Ordinarily, the term assignment is limited to the transfer of rights that are intangible, like contractual rights and rights connected with property. Merchants Service Co. v. Small Claims Court , 35 Cal. 2d 109, 113-114 (Cal. 1950).

An assignment will generally be permitted under the law unless there is an express prohibition against assignment in the underlying contract or lease. Where assignments are permitted, the assignor need not consult the other party to the contract but may merely assign the rights at that time. However, an assignment cannot have any adverse effect on the duties of the other party to the contract, nor can it diminish the chance of the other party receiving complete performance. The assignor normally remains liable unless there is an agreement to the contrary by the other party to the contract.

The effect of a valid assignment is to remove privity between the assignor and the obligor and create privity between the obligor and the assignee. Privity is usually defined as a direct and immediate contractual relationship. See Merchants case above.

Further, for the assignment to be effective in most jurisdictions, it must occur in the present. One does not normally assign a future right; the assignment vests immediate rights and obligations.

No specific language is required to create an assignment so long as the assignor makes clear his/her intent to assign identified contractual rights to the assignee. Since expensive litigation can erupt from ambiguous or vague language, obtaining the correct verbiage is vital. An agreement must manifest the intent to transfer rights and can either be oral or in writing and the rights assigned must be certain.

Note that an assignment of an interest is the transfer of some identifiable property, claim, or right from the assignor to the assignee. The assignment operates to transfer to the assignee all of the rights, title, or interest of the assignor in the thing assigned. A transfer of all rights, title, and interests conveys everything that the assignor owned in the thing assigned and the assignee stands in the shoes of the assignor. Knott v. McDonald’s Corp ., 985 F. Supp. 1222 (N.D. Cal. 1997)

The parties must intend to effectuate an assignment at the time of the transfer, although no particular language or procedure is necessary. As long ago as the case of National Reserve Co. v. Metropolitan Trust Co ., 17 Cal. 2d 827 (Cal. 1941), the court held that in determining what rights or interests pass under an assignment, the intention of the parties as manifested in the instrument is controlling.

The intent of the parties to an assignment is a question of fact to be derived not only from the instrument executed by the parties but also from the surrounding circumstances. When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and parties’ acts to ascertain their intentions. Strosberg v. Brauvin Realty Servs., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998)

The general rule applicable to assignments of choses in action is that an assignment, unless there is a contract to the contrary, carries with it all securities held by the assignor as collateral to the claim and all rights incidental thereto and vests in the assignee the equitable title to such collateral securities and incidental rights. An unqualified assignment of a contract or chose in action, however, with no indication of the intent of the parties, vests in the assignee the assigned contract or chose and all rights and remedies incidental thereto.

More examples: In Strosberg v. Brauvin Realty Servs ., 295 Ill. App. 3d 17 (Ill. App. Ct. 1st Dist. 1998), the court held that the assignee of a party to a subordination agreement is entitled to the benefits and is subject to the burdens of the agreement. In Florida E. C. R. Co. v. Eno , 99 Fla. 887 (Fla. 1930), the court held that the mere assignment of all sums due in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor.

And note that even though an assignment vests in the assignee all rights, remedies, and contingent benefits which are incidental to the thing assigned, those which are personal to the assignor and for his sole benefit are not assigned. Rasp v. Hidden Valley Lake, Inc ., 519 N.E.2d 153, 158 (Ind. Ct. App. 1988). Thus, if the underlying agreement provides that a service can only be provided to X, X cannot assign that right to Y.

Novation Compared to Assignment:

Although the difference between a novation and an assignment may appear narrow, it is an essential one. “Novation is a act whereby one party transfers all its obligations and benefits under a contract to a third party.” In a novation, a third party successfully substitutes the original party as a party to the contract. “When a contract is novated, the other contracting party must be left in the same position he was in prior to the novation being made.”

A sublease is the transfer when a tenant retains some right of reentry onto the leased premises. However, if the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest, then the transfer is an assignment. The assignor is normally also removed from liability to the landlord only if the landlord consents or allowed that right in the lease. In a sublease, the original tenant is not released from the obligations of the original lease.

Equitable Assignments:

An equitable assignment is one in which one has a future interest and is not valid at law but valid in a court of equity. In National Bank of Republic v. United Sec. Life Ins. & Trust Co. , 17 App. D.C. 112 (D.C. Cir. 1900), the court held that to constitute an equitable assignment of a chose in action, the following has to occur generally: anything said written or done, in pursuance of an agreement and for valuable consideration, or in consideration of an antecedent debt, to place a chose in action or fund out of the control of the owner, and appropriate it to or in favor of another person, amounts to an equitable assignment. Thus, an agreement, between a debtor and a creditor, that the debt shall be paid out of a specific fund going to the debtor may operate as an equitable assignment.

In Egyptian Navigation Co. v. Baker Invs. Corp. , 2008 U.S. Dist. LEXIS 30804 (S.D.N.Y. Apr. 14, 2008), the court stated that an equitable assignment occurs under English law when an assignor, with an intent to transfer his/her right to a chose in action, informs the assignee about the right so transferred.

An executory agreement or a declaration of trust are also equitable assignments if unenforceable as assignments by a court of law but enforceable by a court of equity exercising sound discretion according to the circumstances of the case. Since California combines courts of equity and courts of law, the same court would hear arguments as to whether an equitable assignment had occurred. Quite often, such relief is granted to avoid fraud or unjust enrichment.

Note that obtaining an assignment through fraudulent means invalidates the assignment. Fraud destroys the validity of everything into which it enters. It vitiates the most solemn contracts, documents, and even judgments. Walker v. Rich , 79 Cal. App. 139 (Cal. App. 1926). If an assignment is made with the fraudulent intent to delay, hinder, and defraud creditors, then it is void as fraudulent in fact. See our article on Transfers to Defraud Creditors .

But note that the motives that prompted an assignor to make the transfer will be considered as immaterial and will constitute no defense to an action by the assignee, if an assignment is considered as valid in all other respects.

Enforceability of Assignments:

Whether a right under a contract is capable of being transferred is determined by the law of the place where the contract was entered into. The validity and effect of an assignment is determined by the law of the place of assignment. The validity of an assignment of a contractual right is governed by the law of the state with the most significant relationship to the assignment and the parties.

In some jurisdictions, the traditional conflict of laws rules governing assignments has been rejected and the law of the place having the most significant contacts with the assignment applies. In Downs v. American Mut. Liability Ins. Co ., 14 N.Y.2d 266 (N.Y. 1964), a wife and her husband separated and the wife obtained a judgment of separation from the husband in New York. The judgment required the husband to pay a certain yearly sum to the wife. The husband assigned 50 percent of his future salary, wages, and earnings to the wife. The agreement authorized the employer to make such payments to the wife.

After the husband moved from New York, the wife learned that he was employed by an employer in Massachusetts. She sent the proper notice and demanded payment under the agreement. The employer refused and the wife brought an action for enforcement. The court observed that Massachusetts did not prohibit assignment of the husband’s wages. Moreover, Massachusetts law was not controlling because New York had the most significant relationship with the assignment. Therefore, the court ruled in favor of the wife.

Therefore, the validity of an assignment is determined by looking to the law of the forum with the most significant relationship to the assignment itself. To determine the applicable law of assignments, the court must look to the law of the state which is most significantly related to the principal issue before it.

Assignment of Contractual Rights:

Generally, the law allows the assignment of a contractual right unless the substitution of rights would materially change the duty of the obligor, materially increase the burden or risk imposed on the obligor by the contract, materially impair the chance of obtaining return performance, or materially reduce the value of the performance to the obligor. Restat 2d of Contracts, § 317(2)(a). This presumes that the underlying agreement is silent on the right to assign.

If the contract specifically precludes assignment, the contractual right is not assignable. Whether a contract is assignable is a matter of contractual intent and one must look to the language used by the parties to discern that intent.

In the absence of an express provision to the contrary, the rights and duties under a bilateral executory contract that does not involve personal skill, trust, or confidence may be assigned without the consent of the other party. But note that an assignment is invalid if it would materially alter the other party’s duties and responsibilities. Once an assignment is effective, the assignee stands in the shoes of the assignor and assumes all of assignor’s rights. Hence, after a valid assignment, the assignor’s right to performance is extinguished, transferred to assignee, and the assignee possesses the same rights, benefits, and remedies assignor once possessed. Robert Lamb Hart Planners & Architects v. Evergreen, Ltd. , 787 F. Supp. 753 (S.D. Ohio 1992).

On the other hand, an assignee’s right against the obligor is subject to “all of the limitations of the assignor’s right, all defenses thereto, and all set-offs and counterclaims which would have been available against the assignor had there been no assignment, provided that these defenses and set-offs are based on facts existing at the time of the assignment.” See Robert Lamb , case, above.

The power of the contract to restrict assignment is broad. Usually, contractual provisions that restrict assignment of the contract without the consent of the obligor are valid and enforceable, even when there is statutory authorization for the assignment. The restriction of the power to assign is often ineffective unless the restriction is expressly and precisely stated. Anti-assignment clauses are effective only if they contain clear, unambiguous language of prohibition. Anti-assignment clauses protect only the obligor and do not affect the transaction between the assignee and assignor.

Usually, a prohibition against the assignment of a contract does not prevent an assignment of the right to receive payments due, unless circumstances indicate the contrary. Moreover, the contracting parties cannot, by a mere non-assignment provision, prevent the effectual alienation of the right to money which becomes due under the contract.

A contract provision prohibiting or restricting an assignment may be waived, or a party may so act as to be estopped from objecting to the assignment, such as by effectively ratifying the assignment. The power to void an assignment made in violation of an anti-assignment clause may be waived either before or after the assignment. See our article on Contracts.

Noncompete Clauses and Assignments:

Of critical import to most buyers of businesses is the ability to ensure that key employees of the business being purchased cannot start a competing company. Some states strictly limit such clauses, some do allow them. California does restrict noncompete clauses, only allowing them under certain circumstances. A common question in those states that do allow them is whether such rights can be assigned to a new party, such as the buyer of the buyer.

A covenant not to compete, also called a non-competitive clause, is a formal agreement prohibiting one party from performing similar work or business within a designated area for a specified amount of time. This type of clause is generally included in contracts between employer and employee and contracts between buyer and seller of a business.

Many workers sign a covenant not to compete as part of the paperwork required for employment. It may be a separate document similar to a non-disclosure agreement, or buried within a number of other clauses in a contract. A covenant not to compete is generally legal and enforceable, although there are some exceptions and restrictions.

Whenever a company recruits skilled employees, it invests a significant amount of time and training. For example, it often takes years before a research chemist or a design engineer develops a workable knowledge of a company’s product line, including trade secrets and highly sensitive information. Once an employee gains this knowledge and experience, however, all sorts of things can happen. The employee could work for the company until retirement, accept a better offer from a competing company or start up his or her own business.

A covenant not to compete may cover a number of potential issues between employers and former employees. Many companies spend years developing a local base of customers or clients. It is important that this customer base not fall into the hands of local competitors. When an employee signs a covenant not to compete, he or she usually agrees not to use insider knowledge of the company’s customer base to disadvantage the company. The covenant not to compete often defines a broad geographical area considered off-limits to former employees, possibly tens or hundreds of miles.

Another area of concern covered by a covenant not to compete is a potential ‘brain drain’. Some high-level former employees may seek to recruit others from the same company to create new competition. Retention of employees, especially those with unique skills or proprietary knowledge, is vital for most companies, so a covenant not to compete may spell out definite restrictions on the hiring or recruiting of employees.

A covenant not to compete may also define a specific amount of time before a former employee can seek employment in a similar field. Many companies offer a substantial severance package to make sure former employees are financially solvent until the terms of the covenant not to compete have been met.

Because the use of a covenant not to compete can be controversial, a handful of states, including California, have largely banned this type of contractual language. The legal enforcement of these agreements falls on individual states, and many have sided with the employee during arbitration or litigation. A covenant not to compete must be reasonable and specific, with defined time periods and coverage areas. If the agreement gives the company too much power over former employees or is ambiguous, state courts may declare it to be overbroad and therefore unenforceable. In such case, the employee would be free to pursue any employment opportunity, including working for a direct competitor or starting up a new company of his or her own.

It has been held that an employee’s covenant not to compete is assignable where one business is transferred to another, that a merger does not constitute an assignment of a covenant not to compete, and that a covenant not to compete is enforceable by a successor to the employer where the assignment does not create an added burden of employment or other disadvantage to the employee. However, in some states such as Hawaii, it has also been held that a covenant not to compete is not assignable and under various statutes for various reasons that such covenants are not enforceable against an employee by a successor to the employer. Hawaii v. Gannett Pac. Corp. , 99 F. Supp. 2d 1241 (D. Haw. 1999)

It is vital to obtain the relevant law of the applicable state before drafting or attempting to enforce assignment rights in this particular area.

Conclusion:

In the current business world of fast changing structures, agreements, employees and projects, the ability to assign rights and obligations is essential to allow flexibility and adjustment to new situations. Conversely, the ability to hold a contracting party into the deal may be essential for the future of a party. Thus, the law of assignments and the restriction on same is a critical aspect of every agreement and every structure. This basic provision is often glanced at by the contracting parties, or scribbled into the deal at the last minute but can easily become the most vital part of the transaction.

As an example, one client of ours came into the office outraged that his co venturer on a sizable exporting agreement, who had excellent connections in Brazil, had elected to pursue another venture instead and assigned the agreement to a party unknown to our client and without the business contacts our client considered vital. When we examined the handwritten agreement our client had drafted in a restaurant in Sao Paolo, we discovered there was no restriction on assignment whatsoever…our client had not even considered that right when drafting the agreement after a full day of work.

One choses who one does business with carefully…to ensure that one’s choice remains the party on the other side of the contract, one must master the ability to negotiate proper assignment provisions.

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Employment Tribunal Gives Clarification on Agency Workers' "Pay Between Assignments Contracts"

Posted on 31 Jan 2013

New employment contracts issued to agency workers by an employment agency complied with the “Swedish derogation” in the Agency Workers Regulations (“AWR”). It did not matter that the agency workers worked for the same hirer before and after the new contracts were issued.

Regulation 10 of the AWR provides an exception from the right of agency workers to the same pay they would have received if recruited directly by the hirer. The exception only applies where they enter into a permanent contract of employment with the agency, under which they continue to be paid a minimum amount when they are between assignments. These are often called “pay between assignments contracts” or “Swedish derogation contracts”. In order for the exception to apply, the contract of employment must have been entered into “before the beginning of the first assignment under that contract.”

In Bray v Monarch Personnel Refuelling (UK) Ltd , an employment tribunal considered whether Regulation 10 applied in circumstances where agency workers who worked continuously on assignments for BP were told that any current assignments would cease on 30 November 2011. Fresh assignments would start on 1 December 2011, provided that Swedish derogation contracts were accepted. All of the agency workers signed and returned the contracts by the end of the November, except H who returned his on 12 December and all of them reported for work as usual with BP on 1 December 2011.

The issue before the tribunal was whether the contracts had been entered into “before the beginning of the first assignment under that contract”, in circumstances where the agency workers had worked for BP throughout. The tribunal ruled that they had. An assignment does not refer to the entire continuous period during which an agency worker has been hired out to a hirer, but to a particular period of time during which the agency worker is hired out to the hirer. The fact that there had not been a gap between assignments did not change the fact that they had been engaged on separate assignments. The assignment which started on 1 December was the first assignment under the new contract.

The tribunal also found that the contracts had been entered into before the assignment under that contract. Those who had signed the contracts before 1 December had entered into the contracts on the date of signature and H had accepted the new contract by attending for work as normal on 1 December. It did not matter that his acceptance of the new contract was the same day as the first assignment under it. It was sufficient that he had been given the protection Regulation 10 requires by being given the relevant terms several days before he began the first assignment.

The employment tribunal decision in this case provides welcome clarification on an issue which has been open to debate. It confirms that it is possible for an employment agency to create a Swedish derogation contract where agency workers remain working for the same hirer. It will be necessary for a new assignment to be entered into after the contract has been entered into, but the fact that the new assignment is with the same hirer and there is no gap will not be a problem. Had the tribunal come to the opposite view, this would have resulted in employment agencies only being able to enter into Swedish derogation contracts where workers are hired out to a new hirer.

Although the decision is not binding on other tribunals hearing similar cases, it will be a comfort to employment agencies that have entered into or are contemplating entering into Swedish derogation contracts.

The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.

Understanding an assignment and assumption agreement

Need to assign your rights and duties under a contract? Learn more about the basics of an assignment and assumption agreement.

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by Belle Wong, J.D.

Belle Wong, is a freelance writer specializing in small business, personal finance, banking, and tech/SAAS. She ...

The assignment and assumption agreement

The basics of assignment and assumption, filling in the assignment and assumption agreement.

While every business should try its best to meet its contractual obligations, changes in circumstance can happen that could necessitate transferring your rights and duties under a contract to another party who would be better able to meet those obligations.

Person presenting documents to another person who is signing them

If you find yourself in such a situation, and your contract provides for the possibility of assignment, an assignment and assumption agreement can be a good option for preserving your relationship with the party you initially contracted with, while at the same time enabling you to pass on your contractual rights and duties to a third party.

An assignment and assumption agreement is used after a contract is signed, in order to transfer one of the contracting party's rights and obligations to a third party who was not originally a party to the contract. The party making the assignment is called the assignor, while the third party accepting the assignment is known as the assignee.

In order for an assignment and assumption agreement to be valid, the following criteria need to be met:

The initial contract must provide for the possibility of assignment by one of the initial contracting parties.
The assignor must agree to assign their rights and duties under the contract to the assignee.
The assignee must agree to accept, or "assume," those contractual rights and duties.
The other party to the initial contract must consent to the transfer of rights and obligations to the assignee.

A standard assignment and assumption contract is often a good starting point if you need to enter into an assignment and assumption agreement. However, for more complex situations, such as an assignment and amendment agreement in which several of the initial contract terms will be modified, or where only some, but not all, rights and duties will be assigned, it's a good idea to retain the services of an attorney who can help you draft an agreement that will meet all your needs.

When you're ready to enter into an assignment and assumption agreement, it's a good idea to have a firm grasp of the basics of assignment:

First, carefully read and understand the assignment and assumption provision in the initial contract. Contracts vary widely in their language on this topic, and each contract will have specific criteria that must be met in order for a valid assignment of rights to take place.
All parties to the agreement should carefully review the document to make sure they each know what they're agreeing to, and to help ensure that all important terms and conditions have been addressed in the agreement.
Until the agreement is signed by all the parties involved, the assignor will still be obligated for all responsibilities stated in the initial contract. If you are the assignor, you need to ensure that you continue with business as usual until the assignment and assumption agreement has been properly executed.

Unless you're dealing with a complex assignment situation, working with a template often is a good way to begin drafting an assignment and assumption agreement that will meet your needs. Generally speaking, your agreement should include the following information:

Identification of the existing agreement, including details such as the date it was signed and the parties involved, and the parties' rights to assign under this initial agreement
The effective date of the assignment and assumption agreement
Identification of the party making the assignment (the assignor), and a statement of their desire to assign their rights under the initial contract
Identification of the third party accepting the assignment (the assignee), and a statement of their acceptance of the assignment
Identification of the other initial party to the contract, and a statement of their consent to the assignment and assumption agreement
A section stating that the initial contract is continued; meaning, that, other than the change to the parties involved, all terms and conditions in the original contract stay the same

In addition to these sections that are specific to an assignment and assumption agreement, your contract should also include standard contract language, such as clauses about indemnification, future amendments, and governing law.

Sometimes circumstances change, and as a business owner you may find yourself needing to assign your rights and duties under a contract to another party. A properly drafted assignment and assumption agreement can help you make the transfer smoothly while, at the same time, preserving the cordiality of your initial business relationship under the original contract.

Understanding pay between assignments for agency workers

March 28, 2024

As an agency worker, you are entitled to certain additional employment rights. One option your agency may offer is a permanent contract that guarantees pay between assignments when there is no work. However, accepting this arrangement means you forfeit your entitlement to equal treatment on pay after 12 weeks in the same job.

Pay between assignments explained

Under a pay between assignments contract, your agency must provide you with a written agreement outlining the following:

Minimum pay rates and calculation methods
The geographic area where you’re willing to work
Minimum and maximum expected hours of work (at least one hour per week)
The nature of the work
A clear statement indicating that you’re giving up the right to equal pay treatment

When you’re not on an assignment, you must receive pay between assignments that meets these criteria:

At least 50% of the highest rate of pay you received during any one week in your previous assignment
At least the National Minimum Wage

This pay between assignments provision applies only to weeks when you have no work at all and are available for assignments. It does not cover periods between short assignments within the same week.

Ending the contract

If the agency wishes to terminate your pay between assignments contract, they must provide you with at least four weeks of pay between assignments. This payment could occur after a single assignment or between multiple assignments.

Upon termination, you may be entitled to certain rights as an employed worker, such as notice pay or redundancy pay, depending on your length of service.

Challenging unfair practices

Agencies and hirers should not structure arrangements in a way that prevents you from receiving the protection provided by pay between assignments contracts. If they do, you can legally challenge their practices.

If the agency offers you different hours from the expected hours outlined in your contract, you can also challenge this discrepancy.

Getting help

The Labour Relations Agency (LRA) offers free, confidential, and impartial advice on all employment rights issues.

If you are a member of a trade union, you can seek help, advice, and support from them: https://www.unitetheunion.org/

By understanding your rights and options as an agency worker, you can make informed decisions that best suit your needs and protect your interests.

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Assignment of Contract Rights: Everything You Need to Know

The assignment of contract rights happens when one party assigns the obligations and rights of their part of a legal agreement to a different party. 3 min read updated on September 19, 2022

The assignment of contract rights happens when one party assigns the obligations and rights of their part of a legal agreement to a different party.

What Is an Assignment of Contract?

The party that currently holds rights and obligations in an existing contract is called the assignor and the party that is taking over that position in the contract is called the assignee. When assignment of contract takes place, the assignor usually wants to hand all of their duties over to a new individual or company, but the assignee needs to be fully aware of what they're taking on.

Only tangible things like property and contract rights can be transferred or assigned . Most contracts allow for assignment or transfer of contract rights, but some will include a clause specifying that transfers are not permitted.

If the contract does allow for assignments, the assignor isn't required to have the agreement of the other party in the contract but may transfer their rights whenever they want. Contract assignment does not affect the rights and responsibilities of either party involved in the contract. Just because rights are assigned or transferred doesn't mean that the duties of the contract no longer need to be carried out.

Even after the assignor transfers their rights to another, they still remain liable if any issues arise unless otherwise noted in an agreement with the other party.

The purpose for the assignment of contract rights is to change the contractual relationship, or privity , between two parties by replacing one party with a new party.

How Do Contract Assignments Work?

Contract assignments are handled differently depending on certain aspects of the agreement and other factors. The language of the original contract plays a huge role because some agreements include clauses that don't allow for the assignment of contract rights or that require the consent of the other party before assignment can occur.

For example, if Susan has a contract with a local pharmacy to deliver her prescriptions each month and the pharmacy changes ownership, the new pharmacy can have Susan's contract assigned to them. As long as Susan continues to receive her medicine when she needs it, the contract continues on, but now Susan has an agreement with a new party.

Some contracts specify that the liability of the agreement lies with the original parties, even if assignment of contract takes place. This happens when the assignor guarantees that the assignee will continue to perform the duties required in the contract. That guarantee makes the assignor liable.

Are Assignments Always Enforced?

Assignments of contract rights are usually enforceable, but will not be under these circumstances:

Assignment is prohibited in the contract language, which is called an anti-assignment clause.
Assignment of rights changes the foundational terms of the agreement.
The assignment is illegal in some way.

If assignment of contract takes place, but the contract actually prohibits it, the assignment will automatically be voided.

When a transfer of contract rights will somehow change the basics of the contract, assignment cannot happen. For instance, if risks are increased, value is decreased, or the ability for performance is affected, the assignment will probably not be enforced by the court.

Basic Rights of Contract Assignments

Most contracts allow for assignments, but you'll want to double check a contract before signing if this is something you anticipate happening during the lifespan of your agreement. Contract law does impose strict rules and regulations regarding the assignment of contract rights, so it's important to be sure that any transfers of rights are fully legal before acting on them.

Any business agreements should always outline provisions for contract assignments and be well-drafted to be sure that the agreement is effective and enforceable.

Why Use Contract Assignments?

When an assignor hands over their contracts rights to an assignee, they are signing away their obligation to perform and putting that obligation on a new party. The other party involved in the contract should see no difference in how the agreement plays out. If performance is negatively affected by the assignment of rights, something is wrong.

If a party in a contract can no longer perform their duties, it is better to assign their contractual rights to a party who can carry out the duties rather than breach contract.

If you need help with the assignment of contract rights, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

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Agency Workers – What you Need to Know

An agency worker, by definition, is one who has a contract with an agency, but he/she works temporarily for an employer. An agency worker is also called a temp. When you work, the employer can tell you how you should do your work. Here are things that apply to you if you are an agency worker.

A contract is signed between you and an agency
The agency can temporarily supply you to an employer
The employer controls your work
You’re not self-employed

Who is not an agency worker?

There are certain things that stop you from being an agency worker. These things are when:

You get a job through a temporary work agency. But, you’re actually self-employed
You sign a Managed Service Contract and work on it. In the contracts, the agency provides a specific service to a client, like cleaning, catering, and someone from the agency tells you what to do on a day-to-day basis.
You work for an in-house recruitment bank temporarily. In this case, an organization employs its temporary workers directly, and workers only work for that same business or service.
You find direct work with an employer yourself or with the help of a recruitment agency

This means that your employer has loaned you to another employer directly rather than going through an agency.

Pay between assignments contracts

In these contracts, you’re an employee of the agency. Your rights are not the same as other agency workers. This means that you may have to sign a pay between assignments contract with your agency.

If you are on pay between assignments contract, and you end one job and have to wait before starting a new job, then the agency will pay you. This also means that you are not entitled to the same pay as other employees where you’re sent to work, irrespective of the fact that you have worked for more than 12 weeks at the same designation and the same job for the same employer. It’s advisable to seek advice from a professional employment lawyer when it comes to signing a pay between assignments contract.

Employment rights for all agency workers

There are employment rights for all agency workers as well as those on pay between assignment contracts. As an agency worker, you have the following employment rights:

The minimum wage are paid
No unlawful deductions will be made from the wages
No discrimination because of disability , age, gender, marriage and civil partnership, maternity, religion, race, sex, or sexual orientation.
No limit on the hours of the working week (there may be some exceptions)
Availability of paid holidays
Agency workers can be accompanied at a grievance or disciplinary hearing
They have unpaid parental leave. However, they need to meet the necessary conditions
They can ask for flexible working hours when they return from parental leave (they need to meet essential conditions
Statutory maternity pay, statutory sick pay, statutory adoption pay and statutory paternity pay are offered if they meet the qualifying conditions
Right to ask to work in a safe workplace and take certain claims to an employment tribunal

In addition to all, your employment rights prevent employers from dismissing you for whistleblowing. Whistleblowing is when some unlawful activity comes into alight because of you. These activities may include reporting unsafe working conditions, being asked to work too many hours, not being paid the minimum wage or reporting criminal activity

What rights do agency workers not have

claim statutory redundancy pay
claim unfair dismissal in case you are fired without prior notice or good cause
a written statement of the employment terms and conditions
claim maternity, adoption, paternity, and parental leave

To sum up, if you’re not sure whether you are an agency worker or if you think you may not be getting the right you are entitled to, you can get help from an experienced employment lawyer. For complete details about agency workers, get in touch with an experienced employment lawyer .

Our Employment Law Specialists can assist with all types of claims and where possible on a no win, no fee basis. Naturally, we pride ourselves on providing the best possible service to the highest standards, we offer employment law advice on all problems. Call us on 020 3923 4777 or 020 3923 4777

Tom Street qualified as a solicitor in 2003 and has over 20 years experience in employment and litigation law. He studied law at the University of Manchester before undertaking the legal practice course at the College of Law in Guildford, going on to complete his legal training at a firm in Chancery Lane, London. Once fully qualified, he moved to a niche litigation practice in the City of London.

In 2010, Tom set up his own legal practice, Tom Street & Co Solicitors and as part of this, in accordance with his strongly held objective to provide everyone with an easy pathway to justice he established the online portals Do I Have A Case? and Tribunal Claim. These websites are trading names of Tom Street & Co Solicitors.

No Win No Fee Employment Solicitors | Tribunal Claim

Agency workers: pay between assignments

As an agency worker you are entitled to certain additional employment rights. Your agency may offer you a permanent contract and pay you between assignments, but this will mean you will not be entitled to equal treatment on pay.

Being paid between assignments

Your temporary work agency may offer you a permanent contract of employment before the first assignment under the contract and pay you between assignments when there is no work (pay must be at least 50 per cent of the pay you receive while on assignment and at least the National Minimum Wage). This provision is sometimes called Swedish derogation.

This will mean, however, that you will not be entitled to equal treatment on pay (including holiday pay) after 12 weeks in the same job. All other entitlements will apply in the same way as for other agency workers.

You cannot be forced to sign this type of contract and it may not suit everyone.

If your agency offers you a permanent contract it must set out in writing:

minimum pay rates and how they are calculated
the location of work reflecting where you are willing to travel
minimum and maximum expected hours of work
this must be at least one hour a week
the nature of the work
a statement that makes it clear that you are giving up the right to equal treatment with regard to pay

When you're not working you must receive pay between assignments.This must be:

at least 50 per cent of the rate of pay from your previous assignment calculated at the highest rate of pay received during any one week
at least the National Minimum Wage

You need to check that the terms of the contract meet your needs before signing it.

The agency can't ask you to come into the agency for an hour to avoid paying you between assignments. You'll need to be on a genuine assignment with a hirer on the basis of the terms in your contract.

While the contract is in place you will be entitled to pay between assignments until the agency finds you another job.

The pay between assignments doesn't apply to periods between two short assignments which fall in the same week, for example, if you work on Monday and do not work again until Friday. You will only be paid during the weeks where you have no work at all but are available to work.

If you're not on an assignment and the agency refuses to pay you, you could make a claim to an Industrial Tribunal.

Ending a pay between assignments contract

If the agency wants to end the contract it must first give you four weeks' pay between assignments. The four weeks' pay (which is the minimum) could either be at the end of a single assignment or between a series of assignments.

At the end of the contract, if you have already received the four weeks' pay, you will not get the payment again. The contract can end earlier for other reasons if, for example, you resign.

If the agency terminates your contract, you might be entitled to certain rights as you have a contract of employment. These may depend on the length of your service but could include:

redundancy pay

Getting equal treatment

Agencies and hirers shouldn't structure arrangements in a way that stops you getting the protection provided by pay between assignments contracts. If they do, they could be legally challenged.

If the agency offers you different hours from the expected hours of work included in your contract you can challenge this.

Where to get help

The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues.

If you are a member of a trade union you can get help, advice and support from them.

Introduction to trade unions

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Labour market reform

Analysis of the use of Pay Between Assignment contracts for agency workers

This study aimed to understand why individuals choose to sign up to Pay Between Assignment contracts.

Qualitative analysis of the use of Pay Between Assignment contracts for agency workers including the role of umbrella organisations

PDF , 1.82 MB , 56 pages

This file may not be suitable for users of assistive technology.

The purpose of this exploratory study was to understand reasons why individuals choose to sign up to Pay Between Assignment contracts, and to obtain more information on the role of umbrella organisations in the use of these contracts. The report focuses on:

the sectors and occupations they are used in
who requests these contracts
why they are used
the strengths and weaknesses of the contracts

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Published: 09 March 2020

Legislation bulletin:

Employment Law changes for agency workers

Claire Bennett 1

BDJ In Practice volume 33 , page 31 ( 2020 ) Cite this article

726 Accesses

Metrics details

Several employment law changes are set to come into force in April 2020. Amongst the changes, are those relating to the rights of agency workers. Two important changes will be implemented on 6 April 2020: the introduction of a Key Information Document (KID), intended to improve the transparency of information given to workers before they agree terms with the employment business and the abolition of the 'Swedish Derogation' or pay between assignment contracts.

Key Information Document

The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 introduce regulation 13A to the Conduct of Employment Agencies and Employment Businesses Regulations 2003

Under the new regulation, recruitment companies must give all agency workers must be given a KID before agreeing temporary work assignment, unless terms and conditions already exist between the parties. Where there are existing terms, the worker will be entitled to a KID when they sign up with a new employment business.

The KID must include certain basic information, including:

The worker's name

The contract type

The name of the employment business

Confirmation of who will pay the worker

Rate of pay

Pay intervals

Statutory deductions

Non-statutory deductions (any fees for goods and services charged to the worker, for example, a DBS check)

Any other benefits and

Leave entitlement.

Key facts documents must also include a representative example statement setting out how listed deductions will be made to a rate of pay. Real numbers must be used in the example statement, although they may be estimated. Recruitment agencies providing temporary workers are therefore likely to require additional information from practices.

Record keeping and enforcement

The Employment Agency Standards inspectorate (EAS) will enforce compliance with regulation 13A. Employment businesses will have to keep records demonstrating that key information documents have been given to agency workers. These records should be retained for a minimum 12 months since work-finding services last occurred.

The Swedish Derogation

Under the Agency Workers Regulations 2010 (AWR), after 12 weeks of service, agency workers are entitled to the same basic employment terms, including pay, as a directly recruited worker. Regulation 10 of the AWR, commonly referred to as the Swedish Derogation, allows agency workers to opt out of equal pay entitlements in exchange for a guaranteed level of pay between temporary assignments.

The Swedish Derogation has been widely criticised for being open to abuse by employment companies. Notably, the Taylor Review of Modern Working Practices, published in July 2017, reported that agency workers were not given the choice of their type of contract, they were either forced to accept a derogation contract or receive no work. The review stated that, under the derogation, it is too easy for companies to avoid paying workers between assignments, by keeping them on longer assignments at reduced pay or by offering them unacceptable assignments when they are out of work.

The Agency Workers (Amendment) Regulations 2019 will revoke the Swedish Derogation, with the aim of increased stability for agency workers. Employment agencies must provide Swedish Derogation workers with a written statement about the change by no later than 30 April 2020. Agency workers can bring a claim in the Employment Tribunal where their agency fails to provide that statement on time.

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Claire Bennett

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Bennett, C. Employment Law changes for agency workers. BDJ In Pract 33 , 31 (2020). https://doi.org/10.1038/s41404-020-0326-7

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Published : 09 March 2020

Issue Date : March 2020

DOI : https://doi.org/10.1038/s41404-020-0326-7

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Making pay between assignments work

The ‘pay between assignments’ section of the Agency Workers Regulations is controversial. Employment adviser Rehan Pasha has the lowdown.

Rehan Pasha, employment adviser at law firm Squire Sanders considers the pros and cons of taking on temporary workers as PBA staff from a recruitment agency and the potential pitfalls to avoid.

The Agency Workers Regulations 2010 came into force on 1 October 2011, with the main aim of equalising agency workers’ pay with that of their employed counterparts after a 12-week qualifying period. However, the regulations also set out an alternative approach, namely the ‘Pay Between Assignments’ model (PBA). In a PBA contract, agency workers give up the potential for pay equality in return for a guarantee that they will be paid for a minimum of four weeks when they’re not working. They become employees of the recruitment agency that places them (and thereby obtaining the legal protections that only an employee can enjoy).

Several newspapers, trade unions and employee representative groups have questioned whether this PBA model is entirely lawful or if it is a loophole that will be closed off once the first cases have been decided at an employment tribunal. Many recruitment agencies, and their clients, are placing their workers on PBA contracts and this situation has led to further confusion about the legislation.

The first point to make clear is that the PBA model is a lawful process. Not only is it expressly set out as an option in the regulations themselves, but also in the European directive upon which the regulations are based. So it seems unlikely, although theoretically possible, that the government will fundamentally revise the Agency Workers Regulations to make the PBA model unlawful.

Although the issues regarding pay for the worker entering into these PBA contracts has been discussed at length in the media, the advantages for such a worker have been somewhat overlooked.

If an individual is ‘temping’ there is no obligation upon the recruitment agency to find that temp any work. The situation is quite different under a PBA contract, as the recruitment agency is then under a positive obligation to be continually looking for and offering the PBA employee additional work. Not only that but the recruitment agency is required to offer work of a type and at a rate of pay and location previously agreed with the PBA employee.

That in turn leads us onto the most significant single benefit – the right to be paid for at least four weeks, even if the worker is not carrying out any work, before the recruitment agency is able to lawfully terminate a PBA contract. The sum that the agency worker is paid is 50 per cent of the maximum salary he received over the previous 12 weeks. This provision makes it more costly for a recruitment agency to dismiss a PBA employee compared to a standard employee if both have only been employed for a brief period of time. It is also a benefit that non-PBA workers are not entitled to.

Although the recruitment agency will potentially be paying its PBA employees a lesser hourly rate than they would if they were temps, there are some significant limitations in taking the PBA route.

Under a PBA contract, the individual becomes an employee of the recruitment agency and obtains significant employment law protection rights that he would not have as an agency worker.

The most important of these rights include those not to be unfairly dismissed and to obtain a redundancy payment. In addition PBA employees will be able to bring grievances against their recruitment agency employer and will most likely need to be taken through a formal process when they are being disciplined or dismissed, both of which can take significant time to manage and can result in employment tribunal claims.

The recruitment agency will need to provide employer’s liability insurance for all PBA employees, in addition to ensuring that they have access to a pension. The time and effort involved in actively seeking further work for the PBA employees and ensuring that they are appropriately managed should not be underestimated and these costs have to be absorbed and borne by the employer recruitment agency.

Ensuring that taking on agency workers is still cost-effective for businesses whilst increasing the legal protection and pay that agency workers receive can be a difficult circle to square. Although it seems fair to say that PBA employees may receive a lower rate of pay than those agency workers who have worked for an end user for more than 12 weeks and benefit from pay equality under the AWR, this focus entirely disregards the other advantages workers gain as a result of entering into a PBA contract.

For many individuals in the current economic climate, having the promise of regular, sustained and protected employment may be preferable to a short-term higher rate of pay but with uncertainty around any longer-term engagement.

Todd was Editor of GrowthBusiness.co.uk between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital. More by Todd Cardy

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BEIS research finds 'pay between assignment' contracts failing

Reporter, Accountancy Daily [2010-2021]

The Department for Business, Energy and Industrial Strategy (BEIS) has published background research on the use of pay between assignment (PBA) contracts and the role of umbrella organisations, two of the topics which are under consideration in current consultations on ‘good work’ proposals

An initial study by Host Policy Research looked at the reasons why individuals choose to sign up to pay between assignment contracts, and to obtain more information on the role of umbrella organisations in the use of these contracts.

Pay between assignment, or the Swedish derogation, involves employment businesses or umbrella companies converting their temporary workers into permanent employees with the promise of paying them between assignments (either at least 50% of the pay they received during the last 12 weeks on their last job or the national minimum wage rate for the hours they worked on the last job, whichever is the greater).

This must be done with the agreement of the agency worker. Agencies are also required to try to find and offer suitable jobs for workers when they are not working.

Crucially, pay between assignment contracts exempt the agency workers from the equal pay element of the Agency Workers Regulations (AWR), which otherwise stipulate that agency workers should receive the same pay (and conditions) they would have received if recruited directly by the hirer. Umbrella companies are therefore free to pay agency workers who sign these contracts less than permanent staff doing the same job. From the agency workers’ perspectives, pay between assignment contracts potentially offer a degree of flexibility and financial security.

The research found that far from being confined to certain sectors, pay between assignment contracts are used in a range of sectors and occupations and are particularly prevalent in low wage occupations. Whilst some agencies and umbrella organisations do not use PBAs, for others they are the contract of choice.

Of the 17 umbrella organisations that agreed to be interviewed, six (35%) do not use pay between assignment models and 11 (65%) do. Of those that use pay between assignment contracts, the extent to which they are used varies considerably. Five umbrellas used them with a very small percentage of employees (3% or fewer), one used them exclusively, and the remainder had between a quarter and a half of their employees on pay between assignment contracts.

The researchers said it was clear that all of the worker interviewees were not aware of the implications of the contract when they started but had discovered the drawbacks since. Two of the interviewees knew they were on pay between assignment contracts but had not registered that this meant they should be paid between assignments. They are all aware that they are getting paid less than comparators.

The research company said it was also clear that ‘pay between assignments’ rarely happens. Individuals either are on very long term contracts or umbrellas/agencies have devised schemes to keep their exposure to a minimum, many contrary to the requirements set out in the regulations. Whether this is intentionally flouting the regulations or is due to ignorance is unclear. Where pay between assignment does happen it is often funded by deductions from the workers’ pay when they are working on assignments.

As a result, the report makes a number of recommendations. These include tightening up pay between assignment regulations; raising awareness amongst agency workers about the implications of signing pay between assignment contracts; providing firmer guidance on what is reasonable in terms of what workers are required to do in order to remain eligible for pay between assignment; and developing more guidance on expenses.

Qualitative Analysis of the use of Pay Between Assignment contracts for Agency Workers including the role of Umbrella Organisations is here.

Report by Pat Sweet

Pat Sweet | Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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Your employment rights after 12 weeks – Agency workers

Working through an agency
Your employment rights from the start
Your employment rights after 12 weeks
If there's a problem with the agency

Once you've worked on the same 'assignment' (period of work) at the same 'hiring organisation' (company) for 12 weeks, you get more rights. This is called the '12-week minimum qualifying period' under the law.

The rights cover:

the right to same pay
the right to same holiday
the right to the same working patterns and rest breaks
time off for 'antenatal' (pregnancy) and adoption appointments

The 12-week qualifying period

A week counts as any 7 days that you work in, from the day your assignment began.

A week still counts towards the 12-week qualifying period if you do not work because of:

pregnancy, childbirth or maternity from the start of your pregnancy to 26 weeks after birth, or your return to work – whichever is earliest
maternity leave
paternity leave
adoption leave
shared parental leave

A week does not count towards the 12-week qualifying period if:

the total break you have between 2 periods of work is no more than 6 weeks
you're absent due to sickness or jury service for 28 weeks or less
you take any of your holiday entitlement
the workplace shuts down, for example for Christmas or industrial action

Your 12-week qualifying period will start again if you:

go back to the same assignment after a break of more than 6 weeks – unless it is due to any of the reasons listed above
go back to the same role after 28 weeks' absence due to sickness or jury service
start a new assignment with a new hiring organisation
start a new role with the same hiring organisation – this role must be 'substantively different'

Under the Agency Workers Regulations 2010, agencies are not allowed to create patterns of assignments that stop you reaching the 12-week qualifying period.

The right to the same pay

After you've reached the 12-week qualifying period, you're entitled to the same rate of pay as direct employees of the hiring organisation. Under the law this is called 'the right to equal treatment to pay'.

The right to equal treatment to pay includes:

holiday pay that's more than the legal minimum
individual performance-related bonuses
overtime pay
allowances for working shifts or unsociable hours

The right does not include:

bonuses linked solely to company performance or to reward long-term loyalty
enhanced maternity, paternity, adoption pay, shared parental pay and parental bereavement pay
company pension schemes
redundancy pay
sick pay that's more than statutory sick pay (SSP)
guarantee payments
season ticket loans
paid time off for trade union duties

Changes to the law on the right to the same pay

Before 6 April 2020, some agencies might have arranged to pay an agency worker between assignments to stop them getting the right to the same pay. This is known as 'derogating from the right to equal treatment to pay'.

However on 6 April 2020 the law changed so that:

these contracts are no longer valid
the agency worker can still make a complaint about such a contract, even if they received it from the employer before 6 April 2020
the agency can still offer an agency worker a permanent employment contract and pay between assignments, but the agency worker will be entitled to equal treatment to pay after 12 weeks

The right to the same holiday

After the 12-week qualifying period, you have the right to the same amount of holiday and holiday pay as direct employees of the hiring organisation.

If the employer gives holiday above the legal minimum of 5.6 weeks, you can choose how you want to use it. You can either:

add it to your holiday entitlement
get paid for it on top of your hourly or daily pay rate and clearly itemised on each payslip
get paid for it in one go at the end of your assignment and clearly itemised on your final payslip

The right to same working patterns and rest breaks

After the 12-week qualifying period, you also have the right to the same working patterns and rest breaks as direct employees of the hiring organisation. This includes any entitlement to longer lunch breaks or other breaks.

Find out more about rules on working hours and rest breaks

Pension rights

Employment agencies must automatically enrol all their agency workers into a pension scheme within 3 months of the start of a contract.

If you do not want to be enrolled into the agency's pension scheme, you must tell the agency and the pension provider you want to opt out of the scheme.

Find out more about pension schemes and rules from The Pensions Regulator

Parental rights

Agency workers have the right to:

not be treated unfairly because of pregnancy or maternity
paid time off for antenatal appointments when pregnant, after reaching the 12-week qualifying period
unpaid time off to attend antenatal appointments with a partner who's pregnant
paid time off to attend up to 5 adoption appointments – this is for a single adopter or the primary adopter in a couple
unpaid time off to attend 2 adoption appointments – this is for the partner of a primary adopter

If you do not have employee status, you're not entitled to:

paternity leave
adoption leave
parental bereavement leave

You can still stop working to care for your child. But you need to tell your agency the dates you cannot work.

While off caring for your child, you might be entitled to one of the following:

statutory maternity pay
Maternity Allowance
statutory paternity pay
statutory adoption pay
statutory shared parental pay

Find out more about time off work for parents

Pregnancy and agency work

Your hiring organisation must carry out a risk assessment for you when you tell them in writing that:

you're pregnant
you've given birth within the last 6 months
you're breastfeeding

They should review the risk assessment regularly.

By law, agency workers must not be treated differently to other workers.

If there is a health and safety risk to you or your unborn baby, your hiring organisation must remove it.

If it's not possible to remove the health and safety risk to you or your unborn baby, your hiring organisation must tell your agency.

Your agency must either:

find you another suitable assignment
suspend you on full pay for the length of your original assignment

Under the Employment Rights Act 1996 and the Agency Workers Regulations 2010, you would usually need to meet the 12-week qualifying period to be entitled to a different assignment or suspension on full pay.

If your agency finds you other suitable work but you refuse it without a valid reason, they do not have to pay you.

If you're unsure about your health and safety rights as an agency worker and you've just had a baby or are pregnant, you might need to consider getting legal advice .

Find out more from the Health and Safety Executive (HSE) on health and safety rights for:

agency workers
new mothers and pregnant workers

If you like, you can tell us more about what was useful on this page. We cannot reply – so do not include any personal details, for example your email address or phone number. If you have any questions about your individual circumstances, you can contact the Acas helpline .

Assignment of Contract

Jump to section, what is an assignment of contract.

An assignment of contract is a legal term that describes the process that occurs when the original party (assignor) transfers their rights and obligations under their contract to a third party (assignee). When an assignment of contract happens, the original party is relieved of their contractual duties, and their role is replaced by the approved incoming party.

How Does Assignment of Contract Work?

An assignment of contract is simpler than you might think.

The process starts with an existing contract party who wishes to transfer their contractual obligations to a new party.

When this occurs, the existing contract party must first confirm that an assignment of contract is permissible under the legally binding agreement . Some contracts prohibit assignments of contract altogether, and some require the other parties of the agreement to agree to the transfer. However, the general rule is that contracts are freely assignable unless there is an explicit provision that says otherwise.

In other cases, some contracts allow an assignment of contract without any formal notification to other contract parties. If this is the case, once the existing contract party decides to reassign his duties, he must create a “Letter of Assignment ” to notify any other contract signers of the change.

The Letter of Assignment must include details about who is to take over the contractual obligations of the exiting party and when the transfer will take place. If the assignment is valid, the assignor is not required to obtain the consent or signature of the other parties to the original contract for the valid assignment to take place.

Check out this article to learn more about how assigning a contract works.

Contract Assignment Examples

Contract assignments are great tools for contract parties to use when they wish to transfer their commitments to a third party. Here are some examples of contract assignments to help you better understand them:

Anna signs a contract with a local trash company that entitles her to have her trash picked up twice a week. A year later, the trash company transferred her contract to a new trash service provider. This contract assignment effectively makes Anna’s contract now with the new service provider.

Hasina enters a contract with a national phone company for cell phone service. The company goes into bankruptcy and needs to close its doors but decides to transfer all current contracts to another provider who agrees to honor the same rates and level of service. The contract assignment is completed, and Hasina now has a contract with the new phone company as a result.

Here is an article where you can find out more about contract assignments.

Benjamin W.

Assignment of Contract in Real Estate

Assignment of contract is also used in real estate to make money without going the well-known routes of buying and flipping houses. When real estate LLC investors use an assignment of contract, they can make money off properties without ever actually buying them by instead opting to transfer real estate contracts .

This process is called real estate wholesaling.

Real Estate Wholesaling

Real estate wholesaling consists of locating deals on houses that you don’t plan to buy but instead plan to enter a contract to reassign the house to another buyer and pocket the profit.

The process is simple: real estate wholesalers negotiate purchase contracts with sellers. Then, they present these contracts to buyers who pay them an assignment fee for transferring the contract.

This process works because a real estate purchase agreement does not come with the obligation to buy a property. Instead, it sets forth certain purchasing parameters that must be fulfilled by the buyer of the property. In a nutshell, whoever signs the purchase contract has the right to buy the property, but those rights can usually be transferred by means of an assignment of contract.

This means that as long as the buyer who’s involved in the assignment of contract agrees with the purchasing terms, they can legally take over the contract.

But how do real estate wholesalers find these properties?

It is easier than you might think. Here are a few examples of ways that wholesalers find cheap houses to turn a profit on:

Direct mailers
Place newspaper ads
Make posts in online forums
Social media posts

The key to finding the perfect home for an assignment of contract is to locate sellers that are looking to get rid of their properties quickly. This might be a family who is looking to relocate for a job opportunity or someone who needs to make repairs on a home but can’t afford it. Either way, the quicker the wholesaler can close the deal, the better.

Once a property is located, wholesalers immediately go to work getting the details ironed out about how the sale will work. Transparency is key when it comes to wholesaling. This means that when a wholesaler intends to use an assignment of contract to transfer the rights to another person, they are always upfront about during the preliminary phases of the sale.

In addition to this practice just being good business, it makes sure the process goes as smoothly as possible later down the line. Wholesalers are clear in their intent and make sure buyers know that the contract could be transferred to another buyer before the closing date arrives.

After their offer is accepted and warranties are determined, wholesalers move to complete a title search . Title searches ensure that sellers have the right to enter into a purchase agreement on the property. They do this by searching for any outstanding tax payments, liens , or other roadblocks that could prevent the sale from going through.

Wholesalers also often work with experienced real estate lawyers who ensure that all of the legal paperwork is forthcoming and will stand up in court. Lawyers can also assist in the contract negotiation process if needed but often don’t come in until the final stages.

If the title search comes back clear and the real estate lawyer gives the green light, the wholesaler will immediately move to locate an entity to transfer the rights to buy.

One of the most attractive advantages of real estate wholesaling is that very little money is needed to get started. The process of finding a seller, negotiating a price, and performing a title search is an extremely cheap process that almost anyone can do.

On the other hand, it is not always a positive experience. It can be hard for wholesalers to find sellers who will agree to sell their homes for less than the market value. Even when they do, there is always a chance that the transferred buyer will back out of the sale, which leaves wholesalers obligated to either purchase the property themselves or scramble to find a new person to complete an assignment of contract with.

Learn more about assignment of contract in real estate by checking out this article .

Who Handles Assignment of Contract?

The best person to handle an assignment of contract is an attorney. Since these are detailed legal documents that deal with thousands of dollars, it is never a bad idea to have a professional on your side. If you need help with an assignment of contract or signing a business contract , post a project on ContractsCounsel. There, you can connect with attorneys who know everything there is to know about assignment of contract amendment and can walk you through the whole process.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Contract 14 - Terms and conditions of employment (Regulation 10)

Contract 14 - Terms and Conditions of employment (Regulation 10) (also known as 'Swedish derogation' or 'pay between assignments') contract for Employees.

We advise members not to use Regulation 10 contracts, as Regulation 10 and 11 of the Agency Worker Regulations 2010 were repealed from 06 April 2020, which means that agency workers can no longer waive their rights to equal pay.

The Regulation 10 contracts also includes pay between assignment clauses, which if used, places additional burdens on our members, as there will be a requirement for agency workers to be paid between their assignments, and they will also be entitled to equal pay once they qualify for equal treatment under the Agency Workers Regulations 2010 (AWR).

If members are using Regulation 10 contracts, then your agency workers should have received an equal pay statement on or before 30 April 2020, stating that:

a) they are entitled to equal pay rights under the AWR; and

b) references to no equal parity rights in their Regulation 10 contract no longer applies.

However, the equal pay statement was not required if the Regulation 10 contract was terminated on or before 30 April 2020.

For further guidance, please see our: T he repeal Of Swedish Derogation contracts April 2020 guid ance.

You can use this contract with the following REC contracts:

Contract 16 - Terms and conditions of employment for employees (zero hours)
Contract 16A - Agency worker contract of employment annualised hours

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The agency workers regulations 2010, you are here:.

UK Statutory Instruments
2010 No. 93
Regulation 10
Table of Contents
Previous: Provision
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Permanent contracts providing for pay between assignments

10. —(1) To the extent to which it relates to pay, regulation 5 does not have effect in relation to an agency worker who has a permanent contract of employment with a temporary work agency if—

(a) the contract of employment was entered into before the beginning of the first assignment under that contract and includes terms and conditions in writing relating to—

(i) the minimum scale or rate of remuneration or the method of calculating remuneration,

(ii) the location or locations where the agency worker may be expected to work,

(iii) the expected hours of work during any assignment,

(iv) the maximum number of hours of work that the agency worker may be required to work each week during any assignment,

(v) the minimum hours of work per week that may be offered to the agency worker during any assignment provided that it is a minimum of at least one hour, and

(vi) the nature of the work that the agency worker may expect to be offered including any relevant requirements relating to qualifications or experience;

(b) the contract of employment contains a statement that the effect of entering into it is that the employee does not, during the currency of the contract, have any entitlement to the rights conferred by regulation 5 insofar as they relate to pay;

(c) during any period under the contract in which the agency worker is not working temporarily for and under the supervision and direction of a hirer but is available to do so—

(i) the temporary work agency takes reasonable steps to seek suitable work for the agency worker,

(ii) if suitable work is available, the temporary work agency offers the agency worker to be proposed to a hirer who is offering such work, and

(iii) the temporary work agency pays the agency worker a minimum amount of remuneration in respect of that period (“the minimum amount”); and

(d) the temporary work agency does not terminate the contract of employment until it has complied with its obligations in sub-paragraph (c) for an aggregate of not less than four calendar weeks during the contract.

(2) For work to be suitable for the purposes of paragraph (1)(c) the nature of the work, and the terms and conditions applicable to the agency worker whilst performing the work, must not differ from the nature of the work and the terms and conditions included in the contract of employment under paragraph (1)(a).

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How to monitor Candidates who are exempt from AWR due to “Pay between Assignments”.

Any agency workers that have a 'Pay between assignments contract' are employees of the agency and their rights are slightly different to those of other agency workers. Pay between Assignment workers do not qualify for post AWR pay rates, but they will receive some of the AWR related benefits, namely:

Duration of working time

Rest periods

Rest breaks

Annual Leave

Users must ensure that workers who are on this type of contract are correctly categorised within Adapt. When creating the new Candidate, set the AWR Exempt field to Yes and the reason for exemption to Pay between Assignments.

When a worker who has a Pay between Assignments exemption is placed into a Temporary or Contract Vacancy, an AWR clock is created. The AWR clock will accrue time unless unavailability is logged.

AWR Benefit uplift for "Pay between Assignment" contracts

Once the worker has reached 12 weeks on their AWR clock, they become AWR qualified and only Post AWR benefits apply.

To search for workers who are near to their 12-week qualification period:

Run an Assignment Search with the following criteria:

AWR Qualifying weeks = 11

AWR Exempt field = Yes

AWR Reason = Pay between Assignments

Run the search and save the results. Reformat and refine as necessary.

Select the set of search result(s) required and click onto Batch and AWR Benefits Notification .

Select the method to send the documents:

Enter a subject for the email / letter. Please note that the subject will appear on the email or letter to both the Agency Worker and the Hirer.

Click Confirm and an email or letter will be generated to both the Agency Worker and the Hirer advising them that this placement is about to reach AWR qualification and that they will be eligible for AWR benefits.

A Batch record will be created when this activity is run. It will list all linked Candidates and attach the email templates sent and any failure reports. Each Candidate Journal will show a link to this batch record.

Note: The AWR benefits notification batch activity no longer includes past assignments and can no longer be run if an assignment has already been notified of AWR Qualification.

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COMMENTS

Assignments: The Basic Law
Assignments: The Basic Law The assignment of a right or obligation is a common contractual event under the law and the right to assign (or prohibition against assignments) is found in the majority of agreements, leases and business structural documents created in the United States.
Assignment Agreement: What You Need to Know
An assignment agreement is a contract that authorizes a person to transfer their rights, obligations, or interests in a contract or property to another person.
UK: Agency Workers Entitled to Pay Parity
From 6 Apr 2020, UK temporary agency workers employed on a "pay between assignments" contract —also known as a "Swedish derogation" contract — will be entitled to pay parity with directly hired employees after 12 continuous calendar weeks in the same role.
Employment Tribunal Gives Clarification on Agency Workers' "Pay Between
These are often called "pay between assignments contracts" or "Swedish derogation contracts". In order for the exception to apply, the contract of employment must have been entered into "before the beginning of the first assignment under that contract."
Understanding an assignment and assumption agreement
The assignment and assumption agreement. An assignment and assumption agreement is used after a contract is signed, in order to transfer one of the contracting party's rights and obligations to a third party who was not originally a party to the contract. The party making the assignment is called the assignor, while the third party accepting ...
The end of the Swedish Derogation
The Swedish derogation is shorthand for a special type of employment contract provided for in Regulation 10 of the AWR. Its official name is a "pay between assignments" contract because workers engaged on these contracts with a temporary worker agency (TWA) give up the right to pay parity with comparable permanent staff in return for a guarantee to receive a certain amount of pay when they ...
Understanding pay between assignments for agency workers
If the agency wishes to terminate your pay between assignments contract, they must provide you with at least four weeks of pay between assignments. This payment could occur after a single assignment or between multiple assignments.
Assignment of Contract Rights: Everything You Need to Know
The assignment of contract rights happens when one party assigns the obligations and rights of their part of a legal agreement to a different party.
Agency Workers
Pay between assignments contracts In these contracts, you're an employee of the agency. Your rights are not the same as other agency workers. This means that you may have to sign a pay between assignments contract with your agency.
What Is an Assignment of Contract?
An assignment of contract occurs when one party to an existing contract (the "assignor") hands off the contract's obligations and benefits to another party (the "assignee"). Ideally, the assignor wants the assignee to step into their shoes and assume all of their contractual obligations and rights. In order to do that, the other party to the ...
Agency workers: pay between assignments
Being paid between assignments Your temporary work agency may offer you a permanent contract of employment before the first assignment under the contract and pay you between assignments when there is no work (pay must be at least 50 per cent of the pay you receive while on assignment and at least the National Minimum Wage). This provision is sometimes called Swedish derogation.
The use of Pay Between Assignment contracts for agency workers
Swedish Derogation Contracts, otherwise known as Pay Between Assignments has been a term mentioned widely in relation to the Matthew Taylor review and qualitative analysis, published by BEIS, considers this area of employment practice.
Analysis of the use of Pay Between Assignment contracts for agency
This study aimed to understand why individuals choose to sign up to Pay Between Assignment contracts.
PAY BETWEEN ASSIGNMENTS CONTRACTS Sample Clauses
PAY BETWEEN ASSIGNMENTS CONTRACTS. 8.1 In the event that the Hirer requests the supply of a temporary worker on a contract in accordance with Regulation 10 of AWR (Reg 10 Contracts), the Hirer agrees ...
Employment Law changes for agency workers
The review stated that, under the derogation, it is too easy for companies to avoid paying workers between assignments, by keeping them on longer assignments at reduced pay or by offering them ...
PDF Pay Between Assignment Survey
The Agency Workers Directive allows for derogation where there is pay between assignments (PBA). It is an exemption from the equal treatment on pay where a temporary agency offers an agency worker a permanent contract of employment that pays the worker between assignments. Agency workers engaged under this derogation benefit from the additional rights associated with being an employee.
Making pay between assignments work
Making pay between assignments work. by Todd Cardy 14 Dec 2011. The 'pay between assignments' section of the Agency Workers Regulations is controversial. Employment adviser Rehan Pasha has the lowdown. Rehan Pasha, employment adviser at law firm Squire Sanders considers the pros and cons of taking on temporary workers as PBA staff from a ...
BEIS research finds 'pay between assignment' contracts failing
Umbrella companies are therefore free to pay agency workers who sign these contracts less than permanent staff doing the same job. From the agency workers' perspectives, pay between assignment contracts potentially offer a degree of flexibility and financial security.
Your employment rights after 12 weeks
these contracts are no longer valid the agency worker can still make a complaint about such a contract, even if they received it from the employer before 6 April 2020 the agency can still offer an agency worker a permanent employment contract and pay between assignments, but the agency worker will be entitled to equal treatment to pay after 12 ...
Assignment of Contract: What Is It? How It Works
An assignment of contract is a legal term that describes the process when a contract assignee wishes to transfer their contractual obligations to another.
Contract 14
The Regulation 10 contracts also includes pay between assignment clauses, which if used, places additional burdens on our members, as there will be a requirement for agency workers to be paid between their assignments, and they will also be entitled to equal pay once they qualify for equal treatment under the Agency Workers Regulations 2010 (AWR).
The Agency Workers Regulations 2010
Permanent contracts providing for pay between assignments. 10. — (1) To the extent to which it relates to pay, regulation 5 does not have effect in relation to an agency worker who has a permanent contract of employment with a temporary work agency if—. (a) the contract of employment was entered into before the beginning of the first ...
Pay Between Assignment Workers
Pay between Assignment workers do not qualify for post AWR pay rates, but they will receive some of the AWR related benefits, namely: Duration of working time. Night work. Rest periods. Rest breaks. Annual Leave. Users must ensure that workers who are on this type of contract are correctly categorised within Adapt.