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Rumours surround Agency Workers Regulations

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13th Sep 2011
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As the countdown continues until the legislation goes live in Blighty, Jon Wilcox takes a look over what the implementation of the AWR means.

In less than three weeks’ time on 1 October, the Agency Workers Regulations (AWR) are scheduled to come into force, ending nearly a decade of attrition between Westminster and Brussels over the implementation of the 2008 EU Temporary and Agency Work Directive.

Despite the impending deadline, The Daily Telegraph recently suggested the Prime Minister is considering taking away some aspects of the legislation laid down by the Department for Business, Innovation and Skills (BIS). Whitehall believes the legislation will cost around £1.5bn annually to implement.

Regardless of whether the law will come into force as outlined by BIS, or David Cameron’s alleged desire to remove some of the provisions will prevail, there are some who regard it as one of the biggest changes to employment law this year.

According to Thomas Bourne and Karen Plumbley-Jones of Bond Pearce LLP, the regulations will provide the estimated 1.3m temporary workers in the UK with basic working and employment conditions that are no less favourable than those of permanent employees – a move they claim will have a big impact on employers.

The lawyers’ view, set out in a recent article on HR Zone is there are two sets of rights:

  • The first arises on day one of an assignment and includes equal access to a company’s facilities such as the staff canteen, crèche and transport services. It also includes the right to know about permanent job vacancies.
  • The more significant set of rights only kick in after 12 weeks, however, and include equal pay, working time, holidays, and so on. Pregnant workers also get equal rights in respect of health and safety and paid time off for ante-natal appointments.

The legislation contains very comprehensive anti-avoidance provisions to prevent companies sacking their temporary and agency workers after 11 weeks in order to avoid paying them the same as permanent employees.

Essentially, if it looks like an assignment is structured to get around the regulations a worker could take a claim to an Employment Tribunal. If they are successful, they will be automatically entitled to equal rights at the point equivalent to 12 weeks of service to their employer. Of course, there may be some situations in which employers will need to move workers between jobs, but they will need to be very careful how they justify that. There is a hefty fine of up to £5,000 if the provisions are breached.

Anyone working through a recruitment agency who is under the direct supervision and control of the hirer will fall under the scope of this legislation, which will also apply to individuals who have their own limited company (PSC) and whose working practices fall within the IR35 tax regime. AccountingWEB members concurred that the introduction of the AWR will reinforce IR35 legislation, strengthening HMRC’s case against anyone whose contract is not an accurate reflection of their working practices.

David Malamatenios of law firm Colman Coyle told HR Zone the regulations would have “considerable bite [and] correspondingly great financial impact on those that regularly use agency workers and also result in an increased bureaucratic burden.

“Many employers may wish to consider alternatives to using agency workers,” he warned.

Further reading

Agency Workers Regulations: BIS guidance

Agency Workers Regulations - AccountingWEB coverage

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By ThornyIssues
14th Sep 2011 12:57

AWR and IR35

Yet again, we have the continued saga of Employment Law tail wagging the Tax Law dog!

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