Over the last decade the contracting industry has been affected by some significant legislative changes and the introduction of the Agency Workers Regulations 2010 ( the “AWR”), which came into force on 1st October 2011 is no exception.
As a leading provider of accountancy, tax advice and support services to freelance contractors, Brookson has a wealth of experience in the contracting world and a strong heritage of compliance.
Brookson is a strong advocate of compliance and stability within the temporary workforce and contractor marketplace and is fully committed to ensuring that things are done the correct way when it comes to you and the AWR.
The AWR implements the European legislation on Agency Workers and came into force on 1st October 2011.
Indeed since the legislation came into force there has been a lot of speculation as to how it would be enforced by the courts and whilst we are yet to see many reported cases on the AWR, the Guidance Notes which accompany the AWR and assist in their interpretation are helpful when considering the issue of pay and bonuses and are a useful starting point when first considering AWR.
The AWR has been introduced to protect 'vulnerable' workers by ensuring temporary agency workers are provided with equal treatment in terms of pay and other basic working and employment conditions as directly employed equivalent employees of the end client (referred to as “Hirers” in the AWR).
With our compliance heritage we consider ourselves best placed to work with recruitment businesses to ensure that the spirit of the AWR is adhered to and vulnerable workers are protected. The Brookson “position” is that this is legislation that the industry needs to comply with rather than seek to create artificial structures to avoid.
As a member of FCSA, Brookson are engaging with recruitment agencies and other providers to work with them in establishing processes to ensure information is exchanged to fulfil its obligations under the AWR.
We therefore have systems in place to ensure the flow of information between client-agency-umbrella to ensure equal treatment and full compliance, so our employees have complete peace of mind that AWR is in hand and they have nothing to worry about.
We have designed a checklist for use with recruitment agencies in obtaining sufficient information to enable compliance with AWR. Recruitment agencies are required to take reasonable steps to gather sufficient information to ensure that their workers are not treated detrimentally compared with their employed counter-parts.
We will stay abreast of any developments and update our website regularly to ensure you don’t miss out on anything important.
No, Individuals who provide services to recruitment agencies and end clients through a limited company and are genuinely in business on their own account (and who therefore do not fall within the “IR35” legislation, thus enabling them to benefit from dividend income) are excluded from the scope of the AWR.
Therefore limited company contractors who are in business of their own account will not be eligible to bring a claim under the AWR.
Yes, employees of umbrella companies ((such as Brookson Solutions Limited, Brookson CIS Limited or Brookson Medical Care Services Limited) fall within the scope of the AWR.
Individuals working PAYE via a recruitment agency will also fall within the scope of the AWR.
It should be noted that individuals who are engaged to work for the Hirer on open-ended long-term placements will not fall within the scope of the legislation (Moran & Ors v Ideal Cleaning Services Ltd & Celanese Acetate Ltd [2013]). In this case the EAT decided that the Workers could not compare themselves to permanent workers at the Hirer’s organisation as their contracts could not be deemed to be “temporary.” To be covered by the legislation a temporary contract must be terminable by some other condition expiring, for example, the ending of a fixed term or completion of a specific task.
Whilst agencies are educating clients on their AWR responsibilities, Brookson are on hand to help agencies and take the stress and strain out of ensuring that the match permanent pay calculations are carried out accurately and all appropriate deductions are taken into account.
Calculating the agency workers pay and comparing it with pay and benefits afforded to the client’s own employees can be a minefield, but it doesn’t need to be. It is important to remember to factor in the items A, B and C (below) when undertaking the comparison.
|
|
Umbrella Employee |
Comparator Employee |
|
Rate paid to umbrella provider |
£Y |
£(no less than) X |
|
Less the following deductions: |
|
|
|
Employer’s National Insurance Contributions |
(£A) |
|
|
Umbrella Margin |
(£B) |
|
|
Holiday entitlement |
(£C) |
|
|
Umbrella worker pay: |
£X |
£(no less than) X |
Benefits afforded to the client’s employees, such as bonuses, vouchers and other monetary entitlements should also be factored into the comparison (where applicable) to ensure an accurate picture is painted.
Securing the comparator information early in the assignment is vital for compliance with AWR. Most of the agencies working with Brookson are securing information relating to a comparable employee’s salary and benefits at the time instructions for a role are received. This ensures that information can be shared quickly and efficiently and any queries resolved well within the initial 12 week period.
Brookson have a dedicated help line for agencies to provide support and guidance in relation to AWR. If you have a query, please do not hesitate to contact us on 0845 058 1227 or by email at [email protected].
What rights are provided by the Regulations?
Workers within the scope of AWR will obtain the following rights from day one of their assignment:
Workers will be able to access collective facilities such as transport, child care arrangements, canteen facilities and similar amenities provided by their Hirer which are available to the end client’s comparable permanent employees.
Workers will be informed of, and be able to apply for, vacancies within the Hirer as they become available in the same way as equivalent permanent employees or workers of the end client.
Individuals engaged on the same assignment for more than 12 weeks will obtain the following rights and benefits:
Workers will be entitled to receive the same basic pay rates, overtime, rest breaks, rest periods, access to night work and night pay, holiday entitlement and holiday pay as directly employed equivalent employees of the end client.
Pregnant workers will also be entitled to paid time off for ante-natal care the same as they would if employed directly by the end client.
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