Understanding AWR

What does this mean to me?

What does the AWR mean for recruiters?

Hopefully the impending introduction of the Agency Workers Regulations (AWR) will not be news to the UK’s recruitment industry. However, largely due to the regulations’ evolution, there is still a lot of confusion out there as to what it actually means for recruiters and their businesses.

The Agency Workers Regulations (AWR), sometimes known as the Agency Workers Directive, is a new piece of legislation that is due to come into effect in October 2011. The aim of the AWR is to protect vulnerable workers from exploitation and ensure them the same basic employment conditions as their permanent equivalents after 12 weeks of service – mainly the right to the same pay, working hours and holidays.

Keep calm and carry on

At this stage of the AWR’s introduction there is no need to panic, the fine detail as to how the AWR will work is yet to be published by the Government, and the legislation itself is not due to come into effect until October 2011 so there is time to be fully prepared. However, smart agencies and clients will be fully up to speed and ahead of the game before the AWR comes into force.

All in this together

When looking at who the AWR will affect, the easy answer is all those involved in the UK flexible workforce market. For the end client (or hirer) there may be cost implications and additional admin in providing the relevant information on comparable employees; to the agent who faces the primary liability for compliance; right through to the umbrella companies who employ the temporary worker.

As stated, the temporary worker’s agency will face the primary liability for compliance with the AWR and this will place an administrative burden on agencies which needs to be addressed sooner rather than later. Being proactive and having the correct personnel and processes in place before the legislation comes into effect, as opposed to once it has been introduced, could see agencies gain a competitive advantage over the rest of the market and help strengthen relationships with clients.

Indeed strong client relationships will be integral to successfully negotiating the AWR as agents will require lots of additional info from their clients, particularly on comparable employees within their client’s business, on which the AWR and its enforcement hinges.

With this in mind, there are a few key points for recruiters to be thinking about:

How do your clients employ temporary workers? Is it via an umbrella, Agency PAYE, as a temporary employee on their own payroll or do they only work with Ltd company contractors? The latter being the easiest option through which to navigate the AWR.

Do your clients pay less for their temps then their equivalent permanent employees? If so, they face a rise in staffing costs once the legislation comes into effect. Will this discourage them from hiring more temps? Will they bring recruitment in-house in order to cut costs or do they expect their agencies to absorb the costs?

Do your clients have a good understanding of the AWR and what this means in terms of equal pay and conditions, how the 12 week qualifying period works and what their liabilities are?

As you can see from the above, there is an opportunity here for recruiters to add value for their clients by offering guidance on the AWR and help them to navigate through it.

For employers themselves, a review of internal procedures by those responsible for the employment and management of temporary workers and a review of current pay rates is essential, as is the need to share this data and co-operate with their agencies.

Employers should also be working with their agencies to make sure they have a firm grasp of the technicalities of the AWR, such as the 12 week qualifying period mentioned earlier, and their obligations under the new legislation such as the obligation to highlight permanent jobs to temporary workers and the obligation to give temporary workers access to the same facilities as their permanent equivalent (e.g. canteens or crèche facilities)’

Equal pay and conditions

As mentioned earlier, the comparable permanent employee is central to the AWR and recruiters must ensure that the end client is providing all the necessary information ahead of any assignment, particularly if the temporary worker is being paid via agency PAYE. This is also true if the temporary worker is employed via an umbrella and agents must decide whether or not they are happy to be the go-between or allow umbrellas direct access to the end client.

Post October 2011, the 12 week qualifying period will come into effect and it will become much easier for temporary workers to bring a case against the end client, agent and service provider to an employment tribunal or court of law as a result. The 12 week period will include multiple assignments if it is the same role with the same hirer, however, it does not have to be via the same agency. This means that it’s vitally important for agencies to have a thorough understanding of where the contractor has been prior to the contract on offer in order to reduce their liability.

Also regarding the 12 week qualifying period, things such as sickness and maternity can postpone it. For example, if an agency worker works for six weeks on a temporary contract basis then falls sick, they can be off work for up to 28 weeks and when they return, where the AWR is concerned, they will still have 6 weeks left of their qualifying period to go.

Watch this space

As the legislation currently stands, for any action to take place a temporary worker must bring a claim to a tribunal. What is more, a direct specific comparable employee is not required for them to do so and there is no cap on the level of compensation that can be awarded. Therefore, in their defence, agencies must be able to demonstrate that they have requested, and acted on, the comparator information from the end client.

The official guidance on the AWR is expected to be published later on this year. As soon as it is, more information as to the detail and what it means for recruiters will be published on this site. In the meantime we welcome all comments and debate.