There is a lot of talk within the contractor marketplace about the Agency Workers Directive. Whilst it was good news that the implementation of the AWD has been delayed until 2011, there is still concern about how the regulations will impact contractors and their marketplace. The AWD was designed to give temporary and contract workers equal working rights with permanent staff after 12 weeks in one particular job.
Limited company contractors are currently not within the scope of the regulations but the employment status of contractors is often challenged by HMRC. This means that clients will not necessarily be able to tell whether contractors are in or outside the AWD before they hire them.
In light of this, clients are asking recruiters to indemnify them against any claims which are brought by workers under the regulation meaning the recruiter would be liable if a claim was brought. Concern has been raised by Association of Professional Staffing Companies that this will mean that clients will have little incentive to abide by the regulations set out in the AWD. Ann Swain, chief executive of the Association of Professional Staffing Companies (APSCo) added;
“End users will be able to push the cost of complying onto recruiters by getting recruiters to indemnify them in respect of any claims made in connection with the Regulations. This will leave ‘vulnerable’ workers no better off and heap further costs on recruiters. The Regulations will give temporary workers who are pregnant or new mothers more rights than equivalent permanent employees. This will impose significant costs on staffing companies.”
The Recruitment and Employment Confederation (REC) claimed a victory following an announcement on the final regulations for the Agency Workers Directive (AWD) and Kevin Green, REC Chief Executive commented;
“We welcome the delayed implementation date and the decision not to impose potentially damaging restrictions on the fees charged by agencies where a temporary worker is taken on permanently by an employer. However, there are real concerns that these EU regulations are ill-adapted to the UK labour market and could limit job opportunities at a time when flexible working options are providing a crucial route into employment.”
Guy Lamb, head of employment at DLA Piper has warned employers and clients that they should begin preparing for implementation of the agency workers directive. Employers that flout with the rules or who move staff around in very different roles every 11 weeks to avoid triggering their employees’ continuous service rights could face tribunal claims and fines.
Lamb explains: “Although the new rules don’t come into force until October 2011, employers will need to think about how they will budget for these new requirements now, and how they are going to place agency staff within their business in the future, to ensure they can still maintain a flexible workforce without breaking the rules. Obviously it is important that employees receive fair treatment within the workplace, whatever their employment status. However, the cost implications of these new rights could be quite significant for manufacturers in our region, in particular. Employers often rely on the flexibility offered by agency staff. They will be keeping a very close eye on their costs as we move out of recession and into recovery.”
As you can see by the comments from those with knowledge of the contractor marketplace, there is concern about how the AWD will affect contractors and also the recruitment sector and Independent Contractor Services will continue to research the topic and provide further updates when appropriate.
