Agency Workers Regulations (AWR)

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One third of businesses may lay off contractors early due to AWR

Posted Jan 12, 2012

A survey of recruiters, carried out by APSCo, suggests that almost 30% of organisations may terminate contract and temp roles prematurely, as a result of the Agency Workers Regulations.

The poll of recruiters shows that around one third of hirers are unwilling to engage some temporary staff beyond the 12 week assignment mark, after which workers gain a range of equal rights, to put them more on par with permanent employees.

The AWR became law on 1st October 2011, which means that the first batch of workers hired since the implementation will have, or will be about to pass the 12 week mark.

As a result, APSCo warns that thousands of temps and contractors may find themselves 'on the bench' this month. Whether this turns out to be the case or not remains to be seen, of course.

AWR has started to impact the market

Chief Executive Ann Swain says that the AWR has started to have a real impact on the recruitment market:

"The AWR is clearly having an impact, even at the professional end of the market. Contractors and temps in areas such as IT or banking usually earn more than permanent staff, but this is not true for all roles, particularly at the entry level, where the AWR may lead to increased costs.

"The initial 12-week qualifying period expired at the end of December, so if these concerns are even close to being accurate, we could see tens of thousands of temporary workers jettisoned onto the labour market in January."

Interestingly, despite the concern that a number of hirers may look to terminate assignments early, only 19% of the recruiters polled believed that the Regulations were having a negative effect on the demand for contractors and temps on the whole.

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