Agency Worker Regulations (AWR)
Agency Worker Regulations (AWR)
Agency Worker Regulations (AWR) October 2011
What exactly is the AWR?
The Agency Workers Directive will be implemented in the UK on 1 October 2011 through the Agency Workers Regulations 2010. The purpose of the Directive is to provide temporary agency workers with equal treatment, in terms of basic working and employment conditions, as they would be entitled to, had they been employed directly to do the same job. The primary objective is to protect vulnerable low-paid agency workers from being disadvantaged by organisations taking advantage of their vulnerable status.
Who is an ‘agency worker’ (AW)?
It’s an individual who is supplied by a temporary work agency (eg a recruitment agency or umbrella company) to work on a temporary basis. However the regulations are very clear that this will “exclude workers who are genuinely......working through their own limited liability company”. In other words, limited company contractors, working through properly established limited supply companies are not affected by AWR, provided their working practices do not put them inside IR35.
For workers choosing to operate through Umbrella Companies rather than establish their own supply company, the legislation is also clear. Umbrella companies operations fall within the scope of AWR, however provided the umbrella company offers one of either what is known as the Swedish Derogation approach, or the “match permanent pay” approach, or both, then the contract is deemed to be compliant with AWR. PCR have contacted all of the umbrella companies we work with, and the majority have already put plans in place to ensure compliance and communicated these out to their temporary workers. If you have any concerns regarding your own umbrella company then you should contact them directly for clarification if they have not already communicated their approach.
What are the rights under AWR if a contract should fall within its scope?
On day one, if the temporary workers contract falls within AWR, the temporary worker has rights to on-site facilities that a comparable permanent employee has, for e.g. the canteen, child care, transport / car parking as well as the right to be informed about new job vacancies within the company in addition to comparable pay to a permanent worker.
After week 13, the agency worker should receive the same working conditions ‘as if’ they were recruited directly by the client. This includes:
- basic salary
- holiday entitlement
- overtime (if applicable)
- bonus (if applicable - relating to individual performance only)
If a temporary workers contract falls within the scope of AWR it is the responsibility of the temporary work agency and the client to ensure that these rights are observed.
In effect the majority if not all of agency workers in the professional markets already earn more than a comparable permanent employee so no issues arise.
The key points
the vast majority of agency workers in the professional markets already earn more than their comparable permanent employee so compliance with AWR will be relatively straight-forward.
- AWR will not be invoked unless a contractor brings a complaint to a tribunal and where the fee the contractor is being paid is already significantly higher than a comparable permanent employee, the contractor will have nothing to gain by bringing a complaint
- PCRs’ contracts with limited company suppliers have been checked and verified to be clearly IR35 and AWR compliant.