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AWR – 12 months on, was it really the industry overhaul everyone expected?

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After being talked about for almost over a decade, the Agency Workers Regulations finally took effect in September 2011. Heralded as the biggest change to agency workers for almost 30 years, its time to reflect on how much the recruitment industry has been affected by “AWR” twelve months on.

“Major overhaul” or “minor tweak” in the recruitment process?

Despite the scare stories of clients culling their temporary workforce in order to avoid having to provide comparable pay and benefits to their permanent staff, several studies have shown that temporary labour has remained unchanged or increased in most sectors. I consider that this clearly demonstrates that the temporary labour market is invaluable to the UK economy.

Given that clients don’t seem to have been put off using ‘temps’ by the Agency Workers Regulations, I feel that the adjustments required to ensure compliance with the Regulations have simply been absorbed by the recruitment agencies, and umbrella companies by tweaking their recruitment processes.

Matched pay 1 – 0 Swedish derogation

What has also become clear is that full compliance with the Regulations is as cost effective in most sectors as relying on permitted avoidance mechanisms such as the permanent contract of employment (also known as a “Regulation 10 contract” or “Swedish derogation”).

 In my view, the Trade Unions successfully created enough bad press around the Swedish Derogation model to shame clients considering this route into full compliance. In doing so, the Trade Unions have significantly reduced the number of clients who want to pay temporary workers less than permanent staff simply by reason of their temporary status.

 A day in court?

There has been precious little publicity about any claims actually getting to an Employment Tribunal hearing and certainly none have reached a stage of being recorded and publicised on the Internet.

Could this be because the very people who are tasked with policing this legislation are the very people who need to earn a living from being engaged as a temporary worker? Most people don’t “bite the hand that feeds”, nor do they wish to become black listed (officially or not) by recruiters – the very people who will help them to pay the mortgage.

Why the lack of claims? 

The lack of tribunal hearings suggests one of two things. Either:

1)    The value of the claim is sufficiently low that businesses are choosing to settle claims early to avoid bad press and save management time in defending claims; or

2)    Workers are reluctant to bring claims through fear of not being able to secure future work.

I don’t consider that there are underhand tactics being employed by recruiters and hirers. The timing of the regulations being introduced has meant that savvy workers realise in a recession that recruitment agencies provide a useful function. Remaining in employment, regardless of the pay, is more important than having an extra (say) £2 per hour in their pocket. There is also the carrot of permanent employment if they don’t rock the boat!

It is also easy to substantiate discrimination under these Regulations. Either a worker is paid less or not, or a worker has access to the same facilities and benefits as permanent staff or not. Defending a clear cut case such as this seems non-sensical which may be further reasoning for the lack of claims.

Clearly too many reasons exist for claims not to progress to a Tribunal hearing at this time.

Too much, too soon.

The first twelve months of any new legislation can give a clear indication of its future success. The Disability Discrimination Act 1995 and Age Discrimination Act 2006 both saw cases going through the tribunals within the first twelve months of coming into force. The Agency Workers Regulations on the other hand is decidedly quite in terms of reported cases which suggests that this piece of European legislation is neither wanted nor required in the United Kingdom at this stage.

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1 Comment

  1. Paddy

    Some companies do still have ways of avoiding paying their temp workers the same as permanent staff. At our place we were told our wages had been worked out against a comparitor – but not a comparitor of someone who works at our branch. They essentially take the most basic version of the job description, find the lowest-paid person who performs roughly the same function, and standardise all temps to that. Which in this particular scenario is about £2k a year less than the starting salary for the job we are actually doing.

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