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Agency Workers Regulations - Contractors

Everything you need to know about the Agency Workers Regulations...

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Agency Workers Regulations - Contractors

  1. 1. Huxley Associatesin association with DLA Piper presentsEverything you need to know about the Agency Workers Regulations A guide for contractors
  2. 2. Our guidesThis guide is part of Huxley Associates’ dedication to supporting our customers and delivering market-leadingrecruitment solutions. As one of the world’s leading recruitment consultancies we pride ourselves on being a keyrecruitment partner for professionals and organisations across a range of sectors.Our series of guides offer best practice advice and an insight into the latest recruitment news, whether you are looking tosecure your next job or make your next hire.About Huxley AssociatesHuxley Associates is one of the world’s leading recruitment consultancies, delivering market-leading permanent andcontract recruitment services across the UK, Europe, Asia, North and South America and Australia.As specialists within the banking & finance, banking technology, energy & natural resources, engineering, HR, IT andsales & marketing sectors we help companies acquire, retain and manage talent. We also represent the best andbrightest talent looking for their next career move.To find out how we can help you visit: www.huxley.com
  3. 3. IntroductionThe Frequently Asked Questions (FAQs) below relate to the Agency Workers Regulations 2010 (AWR), new UK legislationwhich comes into force from 1 October 2011. The aim of the AWR is to protect temporary agency workers by ensuringthrough legislation that they have a right to equal treatment in basic working and employment conditions, as if they wereemployed on a permanent basis after 12 weeks service in the same job. From the 1 October agency workers will alsobe entitled to access certain client facilities and information on client job vacancies from day one of their assignment.The AWR does not change the employment status of agency workers.Please note the AWR adopts the term “agency worker” throughout, so the same terminology is used in these FAQstogether with the “hirer” to mean the hiring company or end-user. “Raising awareness of AWR issues with front-line consultants as well as with clients will be critical to the successful implementation of AWR. With the final document now published, recruiters can accelerate their implementation activities and intensify levels of engagement with employers and workers.” Tom Hadley, REC, Director of Policy and Professional ServicesPlease use the following links to navigate around the FAQs:AWR overview (Q1)Who is an agency worker? (Q2-Q3)Limited company contractors (Q4-Q6)Equal treatment rights (Q7- Q11)Calculating the qualifying period (Q12-Q14)Umbrella companies (Q15-16)Remedies (Q17-18)Further information (Q19)
  4. 4. employees. The 12 week qualification business relationship).FAQs period applies even if the worker has been supplied by two different Therefore, contractors that consider agencies over that 12 week period. themselves “in business on their account” will fall outside theQ1. What do the Regulations say Q2. Who is an agency worker? Regulations. All other temporaryand when will they come into agency contractors are protected byeffect? A. An “agency worker” is defined the AWR. as an individual who is suppliedA. The AWR comes into effect for the by a temporary work agency to If you are a contractor workingUK on 1 October 2011. work temporarily for and under through a PSC and are genuinely the supervision and direction of a self employed we will collect writtenDay one rights client and who has a contract of confirmation from you of this prior to employment or contract to perform the start of a placement and treat theThe day one rights give agency work and services personally with the placement as outside of the scope ofworkers the same access to certain temporary work agency. AWR.facilities provided by the client andinformation on job vacancies as the Many Huxley Associates contractors The Regulations are unlikely to applyhirer’s comparable permanent workers supply their services through one of to individuals working for in-housefrom the first day of assignment. our preferred supplier management temporary staffing banks where a companies, commonly known as company employs its temporaryAn agency worker has the right to “umbrella companies”. Umbrella workers directly, and they onlybe treated no less favourably than companies enter into an employment work for that business, unless thata comparable employee doing the contract with agency workers in order company is specifically set up tosame or similar job in the client’s to supply them to agencies. They offer run agency workers in which case itestablishment in relation to compliant payrolls and take the stress may be within scope. The guidanceinformation about vacancies. out of contracting for many workers. suggests that the Regulations will These umbrella workers fall within the not apply to workers seconded fromAn agency worker also has the right scope of AWR. Some umbrellas may one organisation to another butto be treated no less favourably in offer you a Swedish Derogation option this may depend on the particularrelation to collective facilities and - see Q16 below. circumstances. In practice, whetheramenities, such as a canteen or other or not an arrangement falls withinsimilar facilities, access to childcare Q3. I am an agency worker - when scope of the Regulations will dependfacilities and the use of transport will the AWR apply to me? on the employment and organisationalservices. However, clients can arrangements.justify less favourable treatment on A. The AWR will apply to all newobjective grounds, for example if the placements after 1 October 2011. Q5. Can an agency worker contracthirer is seeking to achieve a genuine For placements running as of 1 out of the AWR?business objective and the treatment October 2011 it will apply after theis a necessary and appropriate way of 12 week qualification period, i.e., 24 A. No, the AWR expressly prohibitsachieving that objective. Cost may December 2011. This means that agency workers from contractingbe one factor taken into account but your placement will need to be out out. The Regulations impose a finepractical and organisational factors of scope or compliant before 24 of up to £5,000 on the agency or hirerwill also be considered. December 2011. where anti-avoidance arrangements have been put in place to prevent theThe client is responsible for providing Q4. Will the AWR apply to limited 12 week qualifying period from beingequal treatment for day one rights. company contractors? met.After 12 weeks - right to equal A. The definition of an “agency However, a contractor can be out oftreatment worker” will exclude the genuinely scope of the AWR either by being self-employed working through their genuinely self-employed or becauseAfter 12 weeks in the same job the own service company (a PSC), but they are employed under a SwedishAWR entitles agency workers to not individuals with their own PSCs Derogation contract - see Q16 below.receive the same basic employment who are not in business on their ownand working conditions as permanent account (i.e. a genuine business to
  5. 5. Q6. I am a PSC Contractor, what Q9. I am an agency worker, will I agency (and subsequently from theimpact does AWR have on my IR35 be entitled to time off for antenatal client if you do not receive a responsestatus? appointments? from your agency within 28 days).A. The two pieces of legislation A. After the 12 week qualifying period, Q12. I am an agency worker, howare unrelated - one relates to a pregnant agency worker will be is the 12 week qualifying periodemployment law rights, the other entitled to paid time off to attend calculated?to tax obligations. However, to be antenatal appointments. Agencyoutside of IR35 it is a criterion that workers will not however, be entitled A. The right to “equal treatment” willyou are self-employed and therefore to receive equal treatment with only be triggered when the agencypresumably you would see yourself as regard to the client’s maternity pay worker has completed 12 continuousoutside the scope of AWR. If you are arrangements but may be entitled calendar weeks service in the sameunsure as to either your IR35 status to statutory maternity pay/maternity role. A calendar week starts on thegenerally or how it may be affected by allowance from the agency. first day of the assignment.AWR, we recommend that you seekindependent professional advice. Q10. How will Huxley Associates Calendar weeks will accrue regardless and the hirer establish the right of how many hours the worker doesQ7. I am an agency worker what rate? on a weekly basis - one hour istype of “equal treatment” / benefits enough.will I be entitled to receive after 12 A. Firstly, we know that ourweeks service? contractors are at the higher end of From Huxley Associates’ perspective, the contracting market and there is we are keen to make the processA. From the 1 October 2011 agency a natural market premium for your easier for all parties and whereworkers who have successfully services to reflect that you do not possible will seek to ensure thecompleted 12 weeks service in the have the security of employment placement is AWR compliant fromsame job, will have a right to equal status, you offer specialist skills day one. This means no worries abouttreatment in basic pay, overtime, and flexible services. We are when the clock starts for any party.bonus and commission related to confident that for the vast majorityindividual productivity and the right to of our placements contractors are Q13. I am an agency worker,be paid and take the same holidays as already receiving a rate in excess of does the 12 week calendar perioda comparable permanent employee. a comparable permanent package apply irrespective of whether IAgency workers will also be entitled to calculated under AWR. am supplied through differentreceive luncheon vouchers and other The right to equal treatment is a right agencies?vouchers with a monetary value (but to equal treatment measured againstnot those provided through a salary a comparable employee of the client A. Yes the clock continues to run. Forsacrifice scheme such as childcare (if there is one) doing broadly similar example, an agency worker workingvouchers). Agency workers will have work within the same organisation. with four different agencies whichthe right to work the same hours as The client can take into account place him or her with the same hirercomparable permanent employees. the agency worker’s qualifications, for just one day (say for one hour) experience and expertise and a each in a 12 week period will beQ8. I am an agency worker what named comparator is not necessary protected under the AWR. We willbenefits will I not be entitled to? – the treatment simply has to equal need you to tell us if you have worked how the client would have treated in the same or similar role for theA. Agency workers will not be entitled the agency worker if they had been same client.to equal treatment in relation to recruited directly.occupational pension schemes, share Q14. What can stop, pause or resetschemes, redundancy pay, maternity/ Q11. I am an agency worker, from the clock?paternity rights or bonuses related whom can I request informationto the company’s performance, about equal treatment and when? A. The 12 week qualifying period willoccupational sick pay, non-cash be reset to zero in the event of anyawards, advances in pay or loans, A. The Regulations give agency break of six weeks or more during oradditional discretionary and non- workers the right to ask their agency between assignments in the samecontractual payments. This will not for information relating to their equal job or upon commencement of aaffect their entitlement to statutory treatment rights. After the 12 weeks new or “substantively different” rolesick pay or statutory maternity pay qualifying period has elapsed, you can with the same hirer. To satisfy thefrom the agency if they qualify for request a written statement from the “substantially different” test there hasthese.
  6. 6. to be a genuine and real difference to Freelance Enhance Limited Q17. I am an agency worker, whatthe role. Factors such as differences (freelanceworld.net) remedies are available to me wherein pay; skills; location; reporting lines; Giant Services Limited I believe that a breach of the AWRequipment and working hours will (giantgroup.com) has occurred?help to establish if the work or duties Orange Genie Cover Limitedare substantially different. (orangegenie.com) A. An agency worker can bring an Parasol Limited Employment Tribunal claim for breachSee below quick view table for certain (parasolgroup.co.uk) of the AWR. A client is responsibleabsences that can stop, pause or Paystream My Max 2 Limited for first day rights and the agency isreset the clock: (paystream.co.uk) responsible for other rights, although Sybersolve Solutions Limited the agency will have a defence if it (sybersolve.com) took “reasonable steps” to obtain relevant information from the client. Event Effect on 12 week period In the first instance we recommend that you speak to your contact at the Agency worker begins a new assignment with Clock resets to zero agency if you are concerned that you new client have not received equal treatment in Agency worker remains with same client but in a Clock resets to zero line with the AWR. substantively different role Q18. Who will make sure that Agency worker has a break of more than 6 weeks Clock resets to zero Huxley Associates is compliant with between similar assignments with same client the Regulations? Agency worker has a break of less than 6 weeks Pauses clock between similar assignments with same client A. Firstly, we feel a responsibility to our contractors and to our clients to Sick leave Pauses clock for up to 28 weeks be compliant with the AWR. Secondly, a government department BIS Annual leave Pauses clock oversees these Regulations; they do monitor us and other agencies and Pregnancy maternity leave or absence Clock keeps ticking review our systems and processes.Q15. What is Huxley Associates’ Q16. I have heard that umbrellas are Q19. Where can I find out furtherpreferred supplier umbrella adopting the “Swedish Derogation information about the AWR?companies doing to be AWR Model”; what is it?compliant by 1 October 2011? A. BIS has a dedicated Agency A. The Swedish Derogation model Worker Directive and RegulationsA. Some umbrella companies were engages the agency worker on a web page which provides a link to theheavily involved in finalising the more permanent type of contract government’s guidance on the AgencyRegulations and they are all actively with a right to some pay between Workers Regulations 2010. Here is themaking changes to their systems to assignments. link to the BIS web pageensure that they can make payments http://www.bis.gov.uk/policies/that will be compliant with the In between assignments the agency employment-matters/strategies/awd.Regulations. Huxley Associates will be worker must receive a level of pay ofsupplying them with the information either 50% of the weekly assignmentthey need to process your placement rate or the national minimum wage,in accordance with AWR. whichever is higher. The weeklyMost umbrella companies on our assignment rate is calculated at thepreferred supplier lists are also highest pay rate and hours enjoyed “The guidance notes forlooking at the Swedish derogation over the previous 12 weeks (or the the AWR will be essential to helpingmodel - see Q16. A list of our duration of the assignment if it lasted recruiters and their clients comply withpreferred supplier umbrella companies 12 weeks or less). The contract the Regulations…” Ann Swain, Chiefis set out below, and further cannot be terminated without the Executive APSCoinformation about their approach to agency worker having receivedthe AWR can be obtained from them at least 4 weeks’ pay betweendirectly: assignments during the contract.
  7. 7. About the authorsTania Bowers is Legal Director for Huxley Associates and, with over ten year’s experience, is an expert in therecruitment sector. She has extensive experience of all legal and practical aspects relating to the recruitment process,including employment law, commercial contracts, litigation and other regulatory issues. Tania has been actively involvedin representing Huxley Associates interests during the consultation phase and the implementation of the legislation,communicating extensively with the APSCo leadership and its members, the REC, other major recruiters and industryaffiliates, such as umbrella management companies. Accordingly, she is well-placed to advise those that use staffingcompanies on the steps that need to be taken to ensure they fully understand the implications of the AWR and are readyfor 1 October 2011.Adam Hartley is a Partner at DLA Piper, and has an has in depth expertise of employment issues arising in the financialservices sector and in particular Adam specialises in solving employee disputes, injunctions and other high courtemployment matters both in the UK and throughout Europe. As well as representing financial services clients, Adamalso acts for a number of clients in the recruitment, medical, IT, telecommunications, retail and film industry sectors. Inaddition to providing strategic advice to solve employment disputes he also provides in-house training and coaching tosenior managers/directors of large private and public companies on all aspects of employment law.These FAQs are intended as a general overview and discussion of the Agency Workers Regulations. They are not intended, andshould not be used as a substitute for taking advice. Huxley Associates and DLA Piper UK LLP will accept no responsibility for anyactions taken or not taken on the basis of this publication.