Umbrella company contractors could find themselves getting more support from the REC this year as the Confederation recognises that 2012 is going to be extremely important for the UK’s flexible workers.

The Recruitment and Employment Confederation is expected to lay down a new four-year development plan, along with new campaigns that highlight the role of agencies and raise client awareness. Furthermore, the REC will continue its talks with the government to reduce red tape and set a regulatory landscape that will benefit contractors and agency workers.

Despite continued economic uncertainty, prospects for contractors look hopeful this year. The implementation of AWR does not appear to have had a negative effect on the recruitment industry and demand for temporary workers remains high.

Meanwhile, contractors working in the construction industry could be set to benefit from the housing minister’s plan to get Britain building.

Grant Shapps said recently that he was allocating £420 million into a building fund that could offer lucrative contracts for people in the construction industry this year. He explained that work came to a halt on many building sites during the recession and the money would enable construction work to recommence, creating much needed jobs as well as new homes.

The minister hopes the funding will create as many as 30,000 new jobs as building work recommences on the 16,000 homes that were put on the back burner a couple of years ago.

Developers will be able to apply for money from the fund in the form of a loan or an equity investment.

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The CIPD has said that everyone should be entitled to flexible working rights, not just parents and carers.

The government has set a deadline of 2015 for the introduction of flexible working for everybody and this must be adhered to if the UK is to avoid a two-tier workforce. Organisations of all sizes get genuine benefits from flexible working, the CIPD pointed out in its reply to the coalition’s consultation on Modern Workplaces.

Mike Emmott, the CIPD’s employee relations adviser, said that a lot of employers are now willing to consider flexible working requests from any member of staff. They realise the benefits of helping their staff achieve the type of balanced work – personal lifestyle enjoyed by workers such as umbrella company contractors.

What concerns the CIPD is that the government is considering exempting micro-businesses and new start-ups from these proposals. Excluding any business from employment regulation could lead to a two-tier labour market and discourage small businesses from expanding.

Emmott went on to call on members of the CIPD to support the proposals for shared parental leave. He said the current division of caring responsibilities is unlikely to shift unless parents are allowed to share leave and pay.

The EEF, the manufacturers’ organisation, also supports flexible working but does not believe that it should be a universal right. Tim Thomas, the organisation’s head of employment affairs, said flexible working is widespread in the manufacturing sector and further regulation is unnecessary. However, the government should simplify its proposals on parental leave, he added.

The REC has also responded to the consultation by suggesting that flexible working does not just apply to permanent jobs. A lot of people opt for a temporary role, simply because it does provide the flexibility they need to balance their personal commitments.

Gillian Econopouly, the REC’s head of policy, said the government needs to increase flexibility whilst keeping the burden of regulations low. Businesses and employees should be encouraged to work together to devise flexible working arrangements that are mutually beneficial.

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SMEs and umbrella company contractors must beware the Bribery Act, according to a congress that took place in Brighton earlier this month.

The Lawyer’s Governance, Risk and Compliance Congress debated at some length the new legislation, which has been in the front of solicitors and external advisers’ minds.

A lively debate took part on the subject of the Bribery Act and regulatory and compliance experts stressed that all businesses, regardless of size, should be making preparations to ensure they comply with the new legislation.

The chief executive of British Expertise, Graham Hand, pointed out that some companies simply don’t understand their obligations and this is bound to lead to prosecutions. Larger organisations could be able to increase the size of their legal departments and get out of corrupt economies, but smaller firms lack the resources to protect themselves against SFO prosecutions.

A recent survey conducted by Thomson Reuters found that 20% of businesses are completely unprepared for the Bribery Act. The legislation will come into force on the first of July and 39% of senior staff think they need to do more preparation. A big concern is that board members are not aware of the impacts the Act may have on the running of their organisation.

16% of those surveyed admitted that they had not discussed anti-corruption legislation with board members and a further 25% said it had only been talked about once. Only 33% of firms with a parent board overseas thought it was necessary to talk to board members at all about the new rules.

75% of companies agreed that existing policies would need to be changed, or new ones implemented, in order to be compliant with the new legislation. However, only 10% of organisations have allocated extra funding and resources to achieve this.

Companies and limited company contractors have a legal obligation to make sure their staff and external umbrella company contractors are fully aware of the organisation’s anti-bribery policies.

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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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The IoD is calling on the coalition to reduce the excessive burden of red tape that is bogging down UK enterprises and umbrella companies.

Although the government promised to reduce the regulatory constraints of employment law, the Institute says these have actually increased since the coalition came into power. Spokesman Alistair Tebbit said that employment law has been increasing gradually over the past 10 to 15 years, an activity that was encouraged by the Labour government. The current government appears to be doing exactly the same even though they pledged the reverse in pre-election campaigning.

The IoD made its comments after David Cameron appointed Lord Young as his new enterprise adviser. Tebbit said Lord Young would need a wide scope as the red tape surrounding employment law affects all businesses, not just a particular sector.

Proposals that are currently under consideration include abolishing the default age of retirement, extending paternal leave and encouraging flexible working, but far from reducing the regulatory burden, these would cause firms additional problems, said Tebbit.

The FSB last month reported that EU regulation costs businesses £107.6 billion per year – 3.5% of the annual European Union GDP. 1.7 million businesses fail in the EU every year and more than half of them say the regulatory burden was a significant factor in their failure.

Earlier this year, Nick Clegg asked the public to visit the Your Freedom website and say which laws they would like to see changed. 46,000 ideas were submitted but Clegg has apparently given up and passed the ideas over to the Home Office which will propose a smaller civil liberties bill. Ironically, Clegg passed it over due to too much detail. Isn’t that exactly what businesses are currently complaining about?

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The coalition promised to cut the amount of red tape that umbrella companies and contractors are subjected to and yesterday Vince Cable announced the first stage of the plan.

He admitted that the wave of new regulations had choked off enterprise and said that the government must change tack and realise that excessive regulations are not necessarily the way to solve problems.

Cable has made a commitment to a ‘one-in, one-out’ approach to all new regulations and he is going to create a cabinet committee to ensure that only high-quality regulations are implemented.

The chief executive of the FPB, Phil Orford, commented that the government needs to ensure that it does not create more bureaucracy when it administers the work of the Reducing Regulation committee.

He believes that if the government can indeed limit the creation of red tape, we can look forward to a culture conducive to small business growth as opposed to the restrictive culture we have at present.

The FSB welcomed Cable’s announcement saying that for some time they have been calling for a simplified regulatory system in order to encourage economic growth amongst SMEs.

There are around 4.8 million small businesses and freelancers in the UK and almost a third of the ones that had hoped to expand were put off by excessive regulations. The second most important factor when it comes to closing down or downsizing is the regulatory framework. Retirement of the owner is the main reason.

David Frost, from the BCC, was also delighted to hear that regulations will be reviewed; adding that businesses would face a bill of more than £11 billion if all the new legislation planned for the next 4 years is allowed to come into force.

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Contractors and freelancers with their own limited company, as well as interim workers who use the services of a PAYE umbrella company could soon discover exactly where they sit under the Agency Workers Directive.

The REC has requested formal discussions with key members of the new coalition government, including both Vince Cable and Edward Davey, who now take up the role of secretary of state for business and business minister respectively.

According to the REC, one of the government’s first tasks should be a full and comprehensive impact assessment of the forthcoming Agency Workers Directive and in particular the important role that contractors, freelancers and temporary workers play within the UK economy.

A spokesperson from the REC said that the entire freelance marketplace is under threat from being over regulated. Both recruiters, contractors and umbrella companies are already struggling under the weight of excessive legislation and red tape.

The REC will make representations to new MPs over the coming months in an attempt to safeguard the future of the flexible labour market in this country.

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