Agency Worker Regulations (AWR)
As you are no doubt aware this wide ranging legislation comes into force on 1st October 2011. In late may the final guidance on AWR, published by BIS, was made available and can be downloaded at bis.gov.uk.
In the next two months we will be finalising our approach to AWR and this is the first in a series of communications where we will expand upon how we intend to deal with the
challenges presented by the legislation.
AWR has implications for end users, [Hirers}, Temporary Work Agencies, Umbrella and CIS providers and of course temporary workers and it is clear from the guidance that a combined approach, where all parties work in concert, is needed if the regulations are to be adhered to.
We are currently taking advice from many parties, including our lawyers, and will have a clearly defined approach well in advance of the 1st October but we thought it would be useful if we set out our general approach and develop this over the next two months.
Exchange of information
If we summarise the legislation, [ignoring for the moment the day 1 rights], it provides for agency workers to receive the same pay and benefits as employed equivalents of the hirer, after a period of twelve weeks. Every party in the supply chain has responsibility for
ensuring compliance.
Given that Umbrella and CIS providers do not have any direct relationship with the hirers it will be necessary for information on pay and benefits of hirers to be provided to us
via our agency clients. The hirer has responsibility for day one rights so it follows that we will not normally need to know that particular information.
What we will require however is detailed information on pay and related benefits so that we can ensure that compliance is maintained throughout.
A large proportion of the workers we supply our clients are outside of AWR because they do not meet the 12 week qualifying period therefore, at this point, we intend to create a process which will request relevant information when an individual worker reaches a
benchmark, for example 10 weeks.
We intend to implement a process which is as simple as possible and which does not place significant burden on our clients and when we have considered this in more detail we will revert to you.
Umbrella
The Regulations discuss Umbrella, but not in any great detail and there remain some grey areas as regards the pay comparator and so on. We are currently taking advice on these areas and will provide further information in our next communication.
In general terms however we are considering two areas:
A Pay Between Assignments Employment Contract, which would remove workers engaged under that form of contract from AWR completely. This type of contract has application for those workers at the higher end of the pay scales.
The fact that in most cases, the Umbrella worker enjoys a higher take home pay than an employed equivalent, the Umbrella worker benefitting from tax and NI free expenses, which the employed worker does not.
AWR will require us to introduce amended contracts, both for our workers and our agency clients and when these have been redrafted we will of course provide these to you and be available to discuss any significant changes.
Our internal processes will also require some changes. For example, we will include the net pay comparison we produce when engaging an Umbrella worker in his or her employment contract.
Self Employed Contractors
For those clients engaged in the Construction Sector we supply construction services in the form of genuinely self employed contractors operating under CIS.
We already operate a very robust system under which workers claiming to be self employed have to be registered with HMRC and complete a status questionnaire which demonstrates that status. If there is any doubt as to self employment we, as the engager, are responsible for the categorisation and the status questionnaire is a vital part of that
process.
The self employed construction workers enters into a “Contract for Services”, which already includes those contractual terms which are normally found in such a contract and in due course we will be amending this to make it yet more robust in terms of AWR.
The AWR guidance is much clearer as regards the genuinely self employed and these workers are outside the regulations and therefore unaffected. AWR only affects contracts of personal service and the existing and revised Contract for Services are and will be
demonstrably outside the regulations.
Summary
AWR, while requiring all parties to adhere to it and no doubt creating additional administration and review, has no impact upon the majority of services we supply to most agency clients as the worker does not reach the 12 week qualification period.
Where a worker is supplied for more than 12 weeks we will agree a simple process with our agency clients to collect the required pay and benefits information and review the individual position, possibly at the ten week mark, feeding information back to our agency clients.
In due course we will provide you with drafts of the revised Umbrella Employment Contract, Pay Between Assignments Contract and revised Contract for Services for Construction workers.
If there are any implications as regards the registration or payments processes, we will advise you in time to discuss and implement any amendments well in advance of the 1st October.
As we receive further advice on the legislation we will share that information with you.
Our view is that, while the regulations do require all parties in the supply chain to comply, this will necessitate much closer co-operation between us to meet the various challenges but if we do work closely together the regulations do not present any insurmountable
challenges and should not result in significant cost pressures to hirers, employment agencies or ourselves.
If you require any further information at this time please do not hesitate to contact us. Indeed, if in your analysis of the regulations you have any information which we could
incorporate in our analysis please do not hesitate to share that with us.
Yours faithfully
KJ Taylor
Managing Director, Bar 2 Limited
I have tried calling you at bar2 this morning and got no answer. I have been told this morning that bar2 have sent emails to all workers stating that some forms need filling out concerning new legislation if said forms are not filled out we wont be getting paid I have not received the email so I am just checking to see if I should of received it because I wont be a happy if I dont get paid please could you let me know if I do need to fill them out by way of email to above address or alternatively contact me on xxxxxxxxxxxx many thanks Spencer slatter
Sorted now, Sorry you couldn’t get through. We will address the tone of our correspondence in future. Thanks