The Recruitment and Employment Confederation (REC) and Freelancer and Contractor Services Association (FCSA) have urged umbrella companies and recruitment agencies to consider the terms for Agency Workers Regulations (AWR), which will go into effect on 1st October. The final guidance on the AWR was recently published by the Department for Business, Innovation and Skills (BIS), leaving just a few months for umbrella companies and recruitment agencies to plan for its arrival.
Under the new EU directive, temporary workers will enjoy the same rights for instance, pay and working conditions as permanent employees. However, because the AWR is designed primarily for the protection of low-paid, vulnerable workers, highly skilled contractors who often earn more than their counterparts will derive slightly modified AWR benefits.
Predicting "less problematic" AWR compliance for highly skilled contractors, FCSA Chairman Stuart Davies offered several directive options for this group. One would be to adopt the "Swedish Derogation" approach, which entails a company providing full pay and employment status between assignments a selection that many umbrella companies are likely to take on. An alternative involves employment with a company that has a "match permanent pay" model and includes full employment rights. Finally, a third option would enable contractors to work through their own limited businesses.
With regard to the recently-published final guidance on the AWR, Gillian Econopouly, Head of Policy at the REC, acknowledged that some sought-after changes had been incorporated. However, she also said that some are still concerned about the "Swedish Derogation Model" or "Pay Between Assignments" arrangements.
Ms Econopouly added that greater detail regarding conditions for terminating a Pay Between Assignments contract would have been ideal; however, she reminded each umbrella company and recruitment agency that guidance "does not have the same legal status as the actual regulations". She added, "No guidance document will ever provide all the answerswhat is important now is that agencies work with their clients to assess the likely impact of AWR and put plans in place for October".
Like Ms Econopouly, Mr Davies advised all agencies and companies associated with the new regulations to start planning now, so that they're more manageable upon becoming law in October.
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