The proliferation of agency employment in Pakistan is a serious social problem and a public policy concern because of the potentially negative implications for agency workers’ basic statutory rights. Agency workers are normally given a vastly different, often negligible, package of benefits compared to their permanent counterparts and are generally excluded from collective bargaining arrangements. Unions regard the use of agency employment as a threat to their jurisdiction and membership. This study explored the motives, nature and implications of agency employment in six case study organisations in Pakistan. A total of eighty-nine interviews, undertaken with employers’ representatives, agency and union officials and agency workers revealed sufficient evidence confirming previous anecdotal evidence that some employment agencies are not truly genuine and the set up was merely a legal fiction. Evidence suggested that agency employment often involves dubious, unfair, law-evading and at times illegal practices, such as the use of pay-rolling agencies. The pay-rolling agency system is potentially an attempt by employers to bypass statutory obligations concerning workers’ benefit entitlements and trade union rights by paying workers through an agency to illustrate the indirectness of employment. It thus appeared from the evidence that the use of temporary agency workers is, in many instances, a labour relations strategy rather than a matter of workforce flexibility, and challenges the widely held belief that temporary work has only been a natural and inevitable response to changes in the economy.