Agency Workers Regulations… 6 months later

 

It has now been over 6 months since the Agency Workers Regulations came into force on 1st October 2011. By December 24th 2011, agency workers who had worked continuously for a period of 12 weeks and for the same employer since the regulations came into force became entitled to the same basic working conditions and employment rights as their permanent counterparts, namely; equal pay, annual leave, access to the same facilities and some bonus related pay schemes.

 

Recent research indicates that two in every three hirers of agency workers have not been affected by the regulations in so far as having to make costly adjustments are concerned. This in part is due to employers already affording agency workers equal treatment to their counterparts from day one of employment. It is also partly due to the type of agency workers hired, for example higher earners such as freelancers are of little cause for concern since they are often well paid and the work is of a specialist nature.

 

For those hirers of agency workers to whom the legislation has had a greater impact, we have witnessed the following methods used to counteract the cost of implementing changes:

 

• Requiring workers to set up personal service companies – although this does not necessarily prevent the person from being classed as an agency worker in itself.

 

• Reducing dependency on agencies – by using workers who are genuinely self-employed i.e. contractors.

 

• Using the “Swedish Derogation” – which in its simplest terms means that an agency workers’ rights to equal pay no longer exist when they are employed on a permanent basis by an umbrella organisation or an agency and receive pay in between assignments.

 

It remains to be seen whether or not the above measures are an acceptable way of avoiding the agency workers regulations. It is worth mentioning that the BIS have put in place clear anti-avoidance measures and will be triggered if; the agency worker has completed more than two assignments with the same hirer, or one assignment with an organisation and at least one assignment with a connected organisation; or has worked more than two roles during an assignment with the hirer and on at least two previous occasions has worked in a role that was substantively different to their previous role.

 

Although it is relatively unclear at this stage as to how businesses are dealing with these new regulations, it seems for many it is not having a detrimental effect on the ability to resource effectively and for the majority it is at most an administrative burden.

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