Government lets down Agency Worker Stakeholders

The Government machine has malfunctioned once again. According to the well connected Association of Labour Providers, guidance from the Government was due in March but now we have slipped into April and not a word.

All stakeholders whether they are employers, agencies and agency workers are anxiously awaiting greater clarification of many aspects of the Regulations.

Do not believe anyone telling you they know the answers because without the guidance notes we are all in the dark but it is unreasonable that the government is mushroom managing the situation with this largely unwarranted piece of Euro inspired legislation as so much needs to be done before implementation on the 1 October 2011.

Everything is uncertain at present and nobody knows how tribunals will react as they have a tendency to follow the letter of the law rather than guidance notes creating another minefield for all involved and another golden pay day for business lawyers who are quietly licking their lips in the background.

Since the Regulations were published in January 2010, much rumour and speculation has arisen. Concerned professional advisors like Skills Provision Limited have sponsored this site and have been advising clients to get prepared but beyond that their hands are tied until the government issues the guidance notes which will be used to develop control software that will be necessary to ensure compliance. We have been working alongside our preferred supplier for sometime but the project is on hold as the time for intelligent guessing has to be replaced by facts. By this constant delay the government is making a rod for industry and its own back.

Why? Possibly because the legislation is needlessly complex and unwarranted! We doubt that will be the message but it could be that the complexity is foxing the drafters with innumerable “what ifs” – if so it fully deserved.

Anyway, in an effort to help stakeholders here is a list of the more contentious bits with our opinion but they come with a smokers warning “this legislation could seriously damage your corporate health” so it is time to sort out a business lawyer as you will need their input shortly:

• Subject to caveats it is true that Hirers can avoid the Regulations by restricting engagements to 11 weeks.
• Agency workers will be entitled to the same bonus payments as employees is untrue
• Agency workers who are employed by limited company contractors are not subject to the Regulations is thought to be a false premise supported by vested interests.
• There is a potential loophole in the Regulations which avoids payments to agency workers retained between assignments.This is true and goes under the title of the Swedish derogation clause and we know that model contracts have been developed along these lines but there are catches.
• Agency workers won't need to take holiday during an assignment is untrue.
• Agency workers with professional qualifications fall outside the Regulations.This is rubbish – it is catch all legislation
• If an agency worker's hourly rate is, over all, better than the pay of an employee they need not receive additional pay or benefits this is a dangerous misconception. The hourly rate is the key – beware.
• Agency workers must be offered suitable vacancies with the hirer at the end of an assignment is again untrue but there are rules on advertising jobs that could be tricky.
• If there are no employees at the hirer doing the same work as the agency worker there is no comparator is true and is keeping any sensible HR departments busy writing job description and gathering evidence of the facts.
• Agency workers will have the rights to the same pay rate as a directly employed worker doing the same job after a continuous 12 week period of working is true and is the backbone of this legislation,.

For Business Lawyers who love sailing close to the wind the regulations contain anti-avoidance provisions which may catch hirers who systematically terminate before the 12 weeks are up and then re-engage the same workers. This is because the Regulations seek to reverse the effect of intentional avoidance on the part of the hirer, but the provisions only bite when the worker has completed two or more assignments or roles with the hirer or with connected hirers. A £5,000 additional award has been introduced for any hirer or agency found to be in breach. Therefore, the hirer must ensure that it has not inadvertently re-hired such workers on three occasions which may be administratively impractical unless sophisticated software is in place that has to cover all locations.

“We are working on such software but are severely hampered by the continuing delays” said Chris Slay “ Our project leader Olof Pilar, who is the world’s leading expert on Swedish derogation, has tendered his resignation in frustration and from an outsiders perspective it is difficult to comprehend the ineptitude of our legislative processes”

There is nothing new in this article but it is issued to raise awareness of the overall challenge. When the government eventually issues the guidance notes we will digest the contents and issue an update but in the interim get prepared and get quality advisors lined up to assist.

Our offer to provide a free assessment of your needs is still available but you do the legwork first. If you want to know more get in touch with one of our sponsors.

Author: Peter Arkwright