Supporting our customers to comply with the Agency Workers

Regulations

Agenda

Overview

Agency Works Regulations

Questions & Discussion

What can we do for our clients next?

• Introductions• Update• Purpose

• Overview & Timescales• Options• Preferred Options

• Implementation of IT & Management systems• Implementation of robust contracts• Signed agreements with our clients

The implementation of the Agency Workers Regulations (AWR) in October 2011 will require clients and Recruitment Agencies to work in partnership to ensure the regulations are adhered to.

The Regulations are the most important legislation to affect employers since the Conduct of Employment Agencies and Employment Businesses Regulations came into force in 2003.

As members of the REC we will keep our clients abreast of all legal implications and changes.

Presently we are evaluating the impact on our clients.

We will ensure our Planning Tools, Payroll system and Driver Passport System will ensure you are in compliance with the new legislation.

We will also comply with any in-house systems our clients use going forward to monitor the new legislation and indemnify our clients against any liability associated.

AWR Compliance & Monitoring

Marian Butterworth- Operations Manager

Gail Radley – Operations Director

Charlotte Harper – Financial Director

Richard Fenton - Operations Manager

The Team

4 Locations

500 Temporary Workers

200 Permanent Workers

2nd Tier Agencies

Our Business

Strategic Approach

Aim to Create Savings

Enhances Relationship

&Creates

Partnership

1 Invoice

ContractValue Partnerships

Our Objective

Reduce Exposure

Visibility and Control

Main Supply

Enhance Relationships

& Create Partnerships

Legal Compliance

The Agency Workers Regulations

PRE 1st SEPTEMBER 2011AWR IMPACT ASSESSMENT

COMPARATOR

Implementation

Agency Workers Regulations 2011

Agency Workers Regulations 2011

Agency Workers Regulations 2011

Agency Workers Regulations 2011

Agency Workers Regulations 2011

Agency Workers Regulations 2011

1st October Agency Workers get two sets of

rights Rights After 12 Weeks•Pay•Working Time•Annual Leave

‘Day One’ Rights•Access to collective facilities•Information on relevant vacancies

Agency Workers Regulations 2011

Options

Pay parity with

permanent workers pay and benefits (not bonus)

Pay-between Assignments

True Self Employment

Terminate before 12

weeks

Companies Directly engage Temps

• 12 weeks after 1st October through Companies

•Drivers must meet the criteria & adhere strictly to our advice

•Regulation 10 “Swedish Derogation” for PAYE Drivers only

•Un-welcome addition to Perm Workforce•Reduces flexibility

•Does not fit with Operational needs or Ethics

Agency Workers Regulations 2011

Why?

Pay between assignments

Swedish Derogation

Demand

Longevity

Liability minimal

Swedish Derogation

(Which Workers?) The

Clients and H&G to confirm

Workers supplied on Pay

Between Assignments

Contracts

Workers signed to Pay Between Assignments Contracts by 1st September (which ones?) and

reporting to and H&G on numbers signed

Contractual Commitment

Required

Indemnity from H&G for losses incurred where workers

supplied without Pay Between Assignments Contract occur

Our approach

H&G understand that our clients will require us to manage the AWR for them. We expect to demonstrate our knowledge of

the legislation and accept the need to invest heavily in our IT infrastructure.

The popular consensus throughout most of our clients is the derogation route which we have been trialing by adopting a “pay between assignments

philosophy”

AWR Monitoring

Operational commitment

to assignments of 16 to 20 hours per

week

Express waiver of

Regulation 5 pay right Pay-between

assignments for minimum of 4 weeks

Employment Contract with

H&GEmployment

Contract defines

suitable work for worker

How it works

AWR - Conclusion

H&G has installed robust technology to ensure legal compliance.

• Has bespoke client terms in place for all legally compliant options.• Has legally compliant terms in place for the supply of mobile &

general workers through a derogation model paid via PAYE.• Has legally compliant terms in place for the supply of mobile &

general workers paid via umbrella companies via derogation model.• Has legally compliant terms in place for Ltd company contractors

who have opted out of the AWR.• Has legally compliant comparator contracts for PAYE workers.

All our contracts (terms & conditions) are viewable on our AWR portal, please go to www.H-G-Recruitment.com or email questions to AWR@H-G-Recruitment.com for an informed answer by our legal department.

LTD Model

Client

H&G = ControlTerms

P/S (LTD)

Client = Control (no Direct Relationship

H&G- Terms

- LTD Co.

Worker (SE / PAYE)

Terms

Umbrella – (Paye Day)

Client

H&G

Terms

Paye Day

Worker

Terms

Terms (Over arching)

Q

Frequently asked Questions & Answers

Q If a client pays double or treble time to its permanent employees for working a Bank Holiday after the 12

weeks, will they have to pay agency workers for the same rate?

A Yes, equal treatment after 12 weeks includes payment at the same pay rates. Pay includes holiday pay, shift

allowances, overtime rates. It does not include bonuses relating to company performance or long service. (Straight forward supplied on PAYE)

Q When preparing our contracts for drivers within the scope, can a contract be for a minimum of hours, usually 4

per day? Can we issue part-time contracts guaranteeing a minimum of hours? Currently we guarantee a 4 day week but it is a gentleman’s agreement. 8 hours per day, that would be a 36 hour contract? This would form the basis of the Swedish derogation. Do you think this is appropriate or too onerous?

A The Regulations do not change the status of agency workers. They are still workers unless you adopt the

Swedish derogation model, in which case they become employees. The Swedish derogation model (Regulation 10 of AWR) provides that where an agency worker has a contract of employment with the agency (which meets the specific conditions set out in Regulation 10 of the AWR), then that worker is not entitled to equal pay. However, the agency worker will still be entitled to equal treatment in respect of working conditions (rights to know about vacancies and rights to on site collective facilities e.g. canteen) as all other agency workers from day one. 

Two key factors relating to the Swedish derogation are that where an assignment has terminated, the agency must take reasonable steps to find suitable alternative employment for the agency worker. Where the agency cannot find suitable alternative work, the agency must provide the agency worker at least 50% of what they were being paid in their previous assignment, provided the amount is not less than the National Minimum Wage (£5.93). The agency must do this for a minimum of four weeks before it can terminate the contract of employment. So, you cannot fix the contract in the way you are suggesting – the amount you have to pay in between assignment depends on the amount they were paid in the previous assignment. The Swedish derogation option is only suitable where you can guarantee a volume of work and where you are prepared to accept the additional liabilities of a contract of employment (e.g. unfair dismissal and redundancy payment rights). If there is not a large volume of work, it would be extremely expensive. (Hence the need for continuity, regulatory and commitment)

Q Our client wishes to know if he pays his own driver’s meal allowance will he have to pay his agency the same

after 12 weeks? (If the client classes this as expenses then, no the agency worker is not entitled).

A It is likely this will fall under the equal pay provisions and that he would have to pay it to agency workers too.

We are awaiting detailed guidance on what the Government means by ‘pay’ (Drivers on PAYE would be entitled to LV not expenses e.g. vouchers, that can be turned into cash are seen as PAYE)

Q If he works his driver’s annualised hours’ contract but however, only has 36 hours available, the driver gets

paid 48 but owes the client 12 hours free during a busy period. How could we safeguard that the driver would be available when it was next busy? Can the contract stipulate that they must work on specific dates? Or that if they have to give us notice before leaving they would pay us back from the final pay?

A The Regulations do not affect the status of the workers so you can continue as you have been previously unless

you adopt the Swedish derogation model. In that case if you asked a driver to carry out certain work they would be contractually bound to do so.

 Q If a client pays overtime after 12 hours basic to their own drivers, would they have to pay overtime to their

agency on the same basis?

A Yes they would (Unless under Swedish or genuinely self employed).

 Q If a client guarantees a minimum hour day 9:- 8 to his own driver, does he have to guarantee the same to an

agency worker?

A Yes, they have to be paid the same after 12 weeks’ work in the same role with the same hirer. (Lower minimum

hour guarantee is ok under the Swedish derogation only). 

 

Q If the drivers are employed by us and work at a site on a regular basis, who does the disciplinary in the event

after 12 weeks?

A Under the Swedish derogation model the agency would be the employer and responsible for discipline although

you would need input from the client. If you do not adopt the Swedish derogation model you continue as normal. (Terms of business would insist that client participation was essential to carry out a process)

Q If different clients have different procedures, do we have to have a separate contract for each one?

A You will have your own disciplinary procedures with your own employee drivers under the Swedish derogation

model; you will just need to inform the drivers what the rules of each workplace are in the same way as now. (Agency has its own set of procedures under the Swedish derogation PAYE, drivers would still be workers then they would not be subject to discipline).

Q When on site working under the direction and control of the client, is the welfare the client’s responsibility or

the agency? e.g. lateness

A In the first instance, it is that of the client. However, the client may refer matters to you since the agency has

the contract with the driver and you would be responsible for disciplining if you are adopting the Swedish derogation model. (Straight forward the client PAYE no disciplines. Swedish derogation agency discipline but clients must provide information trail).

Q If discipline is the agency’s responsibility, what responsibility does the client have in terms of providing

accurate information?

A None unless you make this a contractual requirement (terms of business)

Q Many clients are talking about going down the Swedish derogation route as their preferred route. Do you have

an example contract for this?

A No, but it would be relatively straight forward to amend an existing contract of employment to specify that the

driver is entitled to a certain minimum amount of work and pay between assignments. As for pros and cons, see response to point 2. (The REC will be publishing model contracts)

Q If a worker wants to work for multiple agencies how does this work?

A I am not sure whether you mean in the context of the Swedish derogation route, or just generally. Workers may

work for multiple agencies and may have contracts with each agency. If they are in the same role for 12 weeks but supplied by different agencies they will be entitled to equal treatment after those 12 weeks. Therefore it is very important when they start working for the agency that you check where they have worked before and for how long.

Q How do notice periods work?

A These are only relevant under the Swedish derogation model. You would not normally have notice periods with

agency workers and this will not change under the new legislation unless you adopt the derogation which will mean that, as set out above, if you are unable to supply new work, then you must pay at least 50% of the pay the worker was receiving on the previous assignment, as long as this is not less than the National Minimum Wage, for a minimum of four weeks.

 Q If all the agencies involved needed the individual on the Bank Holiday and the contract included Bank Holiday

working, how could we guarantee the worker’s services? If the worker called in sick, we would not know if he or she was working for one of the agencies.

A The legislation does not affect this situation unless you use the Swedish derogation model in which case you

would ask the employee to work on a specific day. Otherwise you would ask the worker to self-certify that they were sick if they phone in sick as would be normal practice.