Business News
12 week ‘Egg Timer’ for agency workers
In recruitment, agency workers have long been an attractive option best suited to particular roles, granting flexibility from both sides, and high turnover where needed; however plans to be rolled out from October with the introduction of the new Agency Workers Regulations (AWR) will create implications for many businesses.
In essence, the AWR is a good piece of legislation set to protect employees from exploitation who have gone through to employment through a recruitment agency but are directly managed and controlled by the hirer. AWR sets out to do this by implementing a mandatory 12 week time limit on a placement of employment, after which the employee is entitled to the same rights as their permanent co workers – issues such as sick pay and annual leave may fall under this. The AWR legislation will also apply to those working within IR35 and those who have their own limited company or a PSC. The consensus is that the AWR does in fact reinforce IR35 legislation in supporting HMRC’s outlook to highlight cases of anyone whose contract does not reflect their working conditions.
Umbrella companies, to which it suits, in order to meet the requirements of the AWR, can put the “Swedish Derogation Model” into practice. This relates to the equal provision of pay and provides an agreed opt-out section of the legislation, but can only be applied where appropriate.
The kinds of issues and points to consider the AWR raises are those mainly of timing, and how to monitor large volumes of workers coming to 12 week ending periods, how their contracts could/would be administered to the changes, and how and where potential loop holes may occur. Examples of this would be if businesses were to run 11 week only contracts, temporary staff rotation on the 12 week cusp to avoid the changes and how any of these side door antics might implicate businesses legally and through HR.
How the communication will be distributed will also be a key element as to the success and the scale of the implications and repercussions on businesses not complying, to both employee and employer from the HRMC. An employee may be able to bring a case if a contract is terminated based solely on the desire not to implement changes to their contract that would ultimately benefit them, but how would these time periods be calculated? ContractorUmbrella Ltd has published a guide to AWR to bring recruiting partners up to speed on the changes afoot.
The AWR will create massive, if moral, implications on businesses and require much consideration and debate by those taking on agency staff. By protecting those in question further, they may have just become a less attractive option.
