Preparation and compliance key to AWR success
Posted Jun 7, 2011
A leading contractor service providers' association has warned the industry that the implementation of the Agency Workers Regulations (AWR) in October 2011 will be 'painful', and the key to success will lie in proper compliance.
Stuart Davis, the head of the FCSA, which represents some of the leading umbrella companies in the UK, says that industry must make the right preparations over the summer to comply with the new rules, rather than ignoring them, or trying to find clever ways to avoid being caught out.
"To understand AWR, you must understand the core principle behind it - ensuring temporary or agency workers have access to the same basic pay and conditions as their permanent equivalent."
"Highly-skilled professional contractors are not exploited or vulnerable, and have always earned more than their permanent counterparts, so compliance within this segment of the market will be less problematic."
Three ways forward for professional contractors under the AWR rules
Davis says that it is clear that there will be three main options for professional, highly skilled contractors:
1. The Swedish Derogation model, via which umbrella companies employ contractors on a permanent basis and pay them between assignments.
2. The 'match permanent pay' model is another option, which provides full employment rights.
3. Contractors may decide to incorporate and work via their own limited companies.
"Obviously, the ability for workers to be engaged and paid directly via a recruitment business will remain, subject to the recruitment business implementing either a compliant Swedish Derogation or match permanent pay approach."
The key to success is in the preparation
Davis goes on to urge recruiters, clients and service providers to ensure they are prepared for the implementation of the AWR:
"Those ignoring the new legislation or seeking 'clever' evasion strategies are both likely to find themselves targeted strongly by the Department for Business, Innovation and Skills and trades unions, which will actively be looking to support members in bringing cases to tribunal. The key between success and failure will doubtless be to be prepared, and armed with the information needed to chart a compliant course."
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