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Lawyers will Profit from Agency Worker Regulations

Activity of our support website indicates a trend that many employers have ignored the necessary preparation work to be in a good position when temporary employee action clicks in over the Christmas period. It is still not to late to take the compliance quiz.

This is also supported by on and offline activity of temporary labour staff themselves seeking guidance on when they can take action so it is a very mixed bag and in reality nobody knows as we move forward nervously into the 2012.

Figures from the Recruitment and Employment Confederation (REC) appear to challenge claims that employers will lay off large numbers of temporary workers this week to get around the requirements of the new Agency Workers Regulations (AWR).

The December release of the REC’s jobs outlook figures encouragingly shows that 81% of employers plan to either grow their agency workforce or keep it at existing levels. Of those businesses, 31% planned to increase the size of their temporary workforce in the short term, compared with 22% at the same point last year.

AWR, which came into force on 1 October 2011, means organisations must assign temporary staff the same levels of pay, benefits and working conditions as their permanent staff, once they have completed a qualifying period of 12 weeks. It was feared that many employers would choose to lay off temporary staff just before Christmas, when the first 12-week qualifying period due to end on 24 December.

But while many organisations will face increased wage costs as a result of the AWR (the new rules are expected to cost employers an extra £1.8 billion to implement), some employers are looking at different supply models rather than reducing their temporary workforce.

One model, known as the Swedish derogation, means that the temporary worker becomes an employee of the agency, rather than the hiring organisation, and the agency must pay the workers between assignments. This is becoming popular in sectors such as food processing , catering and manufacturing, where there is traditionally high volume of temporary workers over the long term.

“This does involve risk sharing but if structured correctly can work well as it gives choice.” said Chris Slay of specialist of specialist contract labour outsourcer Skills Provision, “but great care has to be taken to ensure that the contracts of employment are robust and we have taken high cost legal advice to that end and our Lawyers have turned this into something of a specialism.

“Employers so long used to bullying supplying agencies will need to work in partnership with their agencies if the model is to work, “Chris added. “Where the employer recognises the extra cost and risk taken on by the agency, it will work well,” he said. “We have negotiated with our clients to have longer notice periods, for example to share the extra cost of paying temps in between assignments.

“We do see a pick up in the use of this route in 2012 but also acknowledge that many clients will prefer to create parity in pay which at the end of the day was the objective of the legislation in the first place. In many cases staff continuity, using trained staff rather than new staff and the sheer hassle factor of constantly churning people will make many see common sense. However, there will be high profile cases emerging against high profile employers because, as we all know, the press just love such opportunities.”

So there you have it , a piece of overarching EU legislation, that was a sledgehammer to crack a nut, that has created burdensome overhead and risk to UKPLC, clicks into meaningful effect, during the festive period, just at the very time that the economy needs practical support rather than red tape.

You couldn’t make it up  but as with everything the Lawyers will profit by representing all parties.Father Christmas has come early for some with an even busier New Year ahead with litigation replacing common sense.


Author: Chris Slay

Skills Provision will allow our articles/quotes to be reproduced on other formats as long as full accreditation is given.