Lawspeed, the recruitment law specialist firm, claims there could be a conflict of interest between HR and finance departments when the Agency Workers Regulations are enforced in October this year.

Lawspeed’s director, Ravi Murphy, said that unlike other rules relating to recruitment agencies, the new regulations contain issues that could lead to conflict.

He cited an example of HR staff finding it hard to fight the unions over the payments made to agency staff whilst finance directors will want to keep costs to a minimum wherever possible. The AWR grants temporary workers the right to the same rate of pay as their permanent counterparts once they’ve been in the same contract for 12 weeks.

The REC has recently raised concerns with the BIS over the draft AWR guidance. The Confederation says further clarification is needed on certain aspects of the AWR including the Pay between Assignments exemption. It would also like to see clearer criteria laid down for the exemption of genuine self-employed limited company contractors.

The REC met with BIS officials last month to highlight concerns and suggest ways in which the final version of the AWR guidelines can be made clearer for recruiters.

Gillian Econopouly from the REC said the organisation has been working with the BIS by holding one-on-one meetings and attending guidance workshop sessions over recent months. More recently, the two bodies met to discuss the guidelines in detail and expect some of the issues raised to be addressed in the final version of the document.

Although the guidance document can never wave a magic wand over dealing with AWR, the REC will continue to urge the coalition to make it as business-friendly as possible.

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The Agency Worker Regulations were back on everybody’s mind at the end of last week.

Following publication of the draft guidelines last Thursday, a two week consultation period is under way during which time the REC will be collecting feedback from its members and submitting a response to the BIS.

The REC has played an active part in all the consultation workshops run by the BIS and this has enabled them to flag areas of specific concern to recruiters. The REC’s legal team will analyse the draft guidance and further information will be provided to members over the next few days.

Last week, the REC met with the TUC to discuss implementation of the Agency Workers Directive as well. As well as highlighting common ground, the meeting underlined the importance of positive dialogue between the Trade Unions and the recruitment sector.

There are differing perspectives on how some of the equality measures should work but the two sides agree on other areas such as making sure employers only work with agencies that are compliant. It was also agreed that the government needs to enforce existing employment regulations effectively.

Sarah Veale, the head of equality and employment rights at the TUC, said it is in the interests of all concerned parties to work together and make the best of the AWR. Honest agencies can gain a lot by demonstrating to clients their understanding of the regulations and helping them get it right.

The director of policy and professional services at the REC, Tom Hadley, said that although there will always be differing views of some issues, progress had been made. The REC will continue to build on its relationship with the TUC and explore common ground. It will also be crucial to maintain regular dialogue with both the unions and employers as implementation draws closer.

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The next four years will see employers paying out an additional £23.87 billion due to new employment laws, according to the British Chambers of Commerce.

Reform to the existing pensions legislation will cost companies £4.5 billion a year, the Agency Workers Directive (AWD) will add another £1.5 billion and a further £174 million will be eaten up as employees take advantage of “time off for training”.

The director-general of the BCC, David Frost, pointed out that the coalition says business growth is at the top of its agenda and yet UK companies are going to be hit hard when these new regulations are enacted.

The government promised to cut the regulatory burden and it must make good on this promise.

Frost continued by saying that until the bureaucracy is reduced, the UK will carry on having high unemployment and that could lead to the possibility of the economic recovery becoming derailed.

The AWR is one of many new regulations that is still bamboozling recruitment agencies and employers. APSCo has come to the aid of agencies and their clients by producing a toolkit to help them comply with the Regulations.

This toolkit will be launched in advance of the BIS guidance documents which will be published in the middle of March. There are three sections to the kit. Section one is a short guide, written in plain English, which explains the Regulations. Section two is a risk assessment toolkit for members of APSCo. This will let members identify whether they will be affected by the AWR. The final section is a toolkit that provides the user with a full list of the implementation issues they need to take into consideration when dealing with their clients.

APSCo’s chief executive, Ann Swain, said that the Association’s members are hungry for information about the AWR. The toolkit will be able to sit on a recruiter’s desk and will help keep AWR compliance costs to a minimum.

Although APSCo is working with the BIS on the guidance notes, the Association feels a toolkit which helps recruiters and clients perform quick impact assessments was of significant value.

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As implementation gets closer, a recent survey has discovered that 80% of freelancers, including those working through umbrella companies, do not know what the AWR is or whether it will affect them.

On Tuesday, the REC launched one of its most extensive support programmes. Called Your AWR Advisor, the programme focuses on assisting REC members prepare for October 1st, the date when the Agency Workers Regulations will be implemented.

The programme includes a wide range of products and guidance services which are exclusively available to members of the REC. The package comprises client packs, an AWR tool kit, model documents, webinars and support and in-house training for recruitment consultants. Members can view the next webinar on Monday the 21st of February. The REC will also be holding a Compliance Summit on the 7th of April, where one of the main topics will be the AWR.

The REC continues to work closely with the Department for Business Innovation and Skills to develop official government guidance on the AWR and the document is expected to be completed in April.

Kevin Green, the chief executive of the REC, said that the next nine months are going to be crucial in terms of implementing the new regulations. The Confederation aims to minimise the effect on recruitment consultancies and their clients and the Your AWR Advisor programme will make sure all members of the REC can plan ahead for the changes that need to be made.

The programme has been devised in response to a poll conducted during the REC’s December webinar, which found that 63% of recruiters needed more information about the regulations, added Green.

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The government has confirmed that it will reform the tribunal system in the UK, a decision that has been welcomed by the REC.

This is a highly relevant area for recruiters. The Agency Workers Regulations will be implemented later this year and this could lead to an increase in the number of claims that are brought before a tribunal.

As part of the new proposals, claimants would have to pay a fee in order to lodge a tribunal action. The qualifying period before people can claim unfair dismissal will be raised to two years and all cases must first go through ACAS before being brought before a tribunal. The net result of these changes should limit the amount of frivolous and unfounded claims.

Tom Hadley from the REC said this was a step in the right direction to help businesses. Members of the REC have already said they feel employment tribunals are a source of unnecessary bureaucracy and expense. ACAS is not predicting a massive increase in tribunals when the AWR are implemented but there are bound to be some claims from umbrella company contractors who feel they are not getting the benefit of equal treatment.

Reforming the tribunal system will reassure both recruiters and clients that the AWR will not add considerable risk to the supply of contractors and temporary workers, Hadley added.

Another grey area for recruiters surrounds the question of equal treatment of benefits and bonuses for agency staff. The REC has been participating in some consultation workshops aimed at addressing recruiters’ concerns. The Confederation will continue working with the coalition to ensure that the Agency Workers Regulations are workable and that comprehensive guidance is provided to recruiters. It will also work alongside recruiters to ensure the necessary implementation systems are in place.

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Umbrella company contractors could find they have to compete against more people in order to secure a role after Adrian Marlowe suggested that temporary work is becoming a more attractive option for jobseekers.

The ARC’s chairman said that the traditional idea of people seeking permanent employment as soon as they leave education is now outdated. The agency workers regulations have created a level playing field with respect to equal pay and working conditions and this makes agency work an attractive alternative to permanent employment. People working on a temporary basis through recruitment agencies already enjoy significant advantages, such as flexibility, that are not open to their permanent counterparts.

Graduate unemployment has hit the IT sector hardest over the past year, according to the Higher Education Careers Service Unit. Unemployment amongst IT graduates rose from 13.7% in 2008 to 16.3% last year and could lead to an increase in the number of skilled IT people choosing to go self-employed.

Despite this, Richard Nott from CWJobs.co.uk claims there are not enough skilled IT staff. Although the current figures show a lot of graduates have been unable to secure a position due to current market conditions, the underlying trend still shows a lack of graduates with the right skill set to fit the world of IT.

Of the people who graduated in 2009, 8.9% or just over 21,000 were still without a job in January this year, registering the highest rate of graduate unemployment since 1993.

A survey conducted by Orange found that 10% of graduates planned to start up their own business as soon as they graduated. 69% of graduates want the chance of flexible working and nearly half say the opportunity to work remotely is no longer a privilege; it is a must.

This sentiment is shared by the general working populace with 68% saying that working from home was an important element of job satisfaction.

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The Recruitment and Employment Confederation has issued a call to contract recruitment agencies, umbrella companies, and the clients they do business with to exercise caution when developing alternative worker policies.

The new recommendations come at a time when the REC says recruiters are increasingly being asked to develop alternative models as the new agency workers regulations loom on the horizon.

The newest trend as identified by the REC has been in the area of “Swedish Derogation,” which has agencies classifying their contracted employees as temporary workers, which affords them higher job security and an expanded set of employment rights.

However, Lorraine Laryea, solicitor for the REC, expressed the need to be cautious before any policy decisions are put in place, as there is a certain level of risk inherent with using alternative employment models.

Ms Laryea stated that the REC has received several queries through its Legal Helpline that have indicated interest in the commercial viability of the Swedish Derogation model, urging that employers take into account the full range of implications of such an employment classification.

Ms Laryea continued, stating that opportunities will arise from new regulatory structures, but new risks are brought to the forefront as well, additionally noting that in a business sector that is being impacted minimally by the new agency workers regulations, radically changing the structure of a recruitment services business may not be a necessity.

Both clients and agencies will find it most beneficial to thoroughly assess the impact of the new regulations, Mr Laryea concluded, and further made note that the Legal Services Team for the REC has published a very specific briefing document in regards to Swedish Derogation, with a close look at other alternative worker models to be examined in depth over the course of the REC’s AWR Training Workshops, which will be forthcoming soon.

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The REC is holding a series of regional workshops around the country to help its members understand how the Agency Workers Regulations will impact their business.

The AWR do not come into force until October next year but the REC has been tirelessly working to ensure businesses and umbrella companies have as much information to hand as possible so that they can start making the necessary preparations for implementation.

The half-day workshops will be held from the end of next month until the middle of November in Birmingham, London, Manchester and Leeds and will give attendees a comprehensive understanding of what affect the Agency Workers Directive will have on them. The London workshop has already been fully booked and the REC is compiling a shortlist of other interested parties in anticipation of adding another date to the schedule.

Employers are now becoming more aware of the Regulations and it is therefore imperative that recruitment agencies can answer questions posed by clients and candidates.

The REC launched its AWR Implementation Pack in June, followed by a webinar in July for members to ask questions on specific aspects of the Regulations. The Confederation has also met with Edward Davey, the minister responsible for implementing the AWR, to make sure he understands the recruitment industry’s concerns about the Regulations.

Kevin Green, the chief executive of the REC, said that they have asked the government to publish official guidance regarding the Regulations as soon as possible. It is vital that everyone get plenty of time to prepare for the far-reaching changes this radical legislation will bring about, he added.

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De Poel, the temporary procurement agency, says that industry ambassadors and the British press need to get their facts right in light of rumours that the coalition government intends to water down some of the Agency Workers Regulations.

One story that appeared recently implied that temporary agency workers would lose potential holiday pay as a result of legislation being revoked. However, temps have been entitled to paid holidays since 1998. Another misconception is that temps get a raw deal and yet in some sectors such as engineering, healthcare and IT they get paid more than permanent staff members.

Matthew Sanders, CEO of De Poel, said that although it is important to protect temporary workers, doing so should not be detrimental to business and the economy.

Last week De Poel joined forces with the ARC which has continually raised concerns regarding the legality of the regulations which are due to come into force in October next year.

Meanwhile the government is set to push ahead with the review of the AWR although any amendments are likely to be minor. All EU member states must implement the agency workers directive by 5 December 2011 and the UK coalition must make sure it complies with the requirements or face the prospect of legal challenges in the future.

The REC is hosting a live webinar this Wednesday to update both clients and candidates on the facts surrounding the AWR and help them prepare effectively for their implementation. Although the event is now fully subscribed, it will be available ‘on demand’ as from Friday 23rd July.

The REC has also compiled a comprehensive implementation pack containing information, tools and advice for businesses.

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The agency workers directive could have an adverse affect on contractors working in the oil and gas industry according to the Aberdeen and Grampian Chamber of Commerce.

The oil and gas sector is in a transition period where flexibility is essential, Peter Sharp from McGrigors’ law firm, told the AGCC recently. This backed up the Chamber’s findings that there had been a marked difference in the effect the recession had on permanent and umbrella company workers

The AWD is due to be enforced in October 2011 and has already been the cause of much controversy. Many experts believe that the regulations were drawn up without taking into consideration the impact they would have on certain sectors.

The REC is also concerned that a review of the AWD will be delayed as a result of the political negotiations that are currently underway to form a new government. A spokesman from the REC said we were now in a “political twilight zone” that could affect the number of contractors working in the UK.

The chief executive of the REC, Kevin Green, says that short-term cuts are not the answer. Reducing the budget deficit and reforming the public sector should be prioritised and this would be best achieved by employing innovative ideas to improve productivity.

The REC will be concentrating on promoting the positive benefits of using contract workers to new MPs over the coming months.

APSCo has voiced their concerns that temporary workers and contractors will cost more once the AWD regulations come into force. Their chief executive, Ann Swain said she was disappointed that none of the main political parties had made commitments to improve employer flexibility.

However, she is encouraged by the news that both the Conservatives and Nick Clegg’s Liberal Democrats have not explicitly endorsed the AWD. She hopes this could lead to the regulations being amended prior to implementation.

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