Legal opinion: Managing compliance with the Agency Workers Regulations 2010

When the Agency Worker Regulations 2010 (AWR) were announced, there were concerns that their implementation would be met with a lack of compliance and countless tribunals. However, since the Regulations became law in October 2011, organisations across the country have coped well and have worked with their recruitment suppliers to adhere to the requirements. Jon Milton of Comensura looks at the lessons learnt.

What have we learnt?

Based on temporary assignment figures, we know that the length of the assignments employers have recruited for has reduced, a direct impact of the AWR. After an initial reduction in assignment lengths following the initial announcement of the AWR, we saw a brief recovery until the beginning of 2012. The average number of assignment days is now below 40 for temporary contracts compared with 61 at the beginning of 2012.

However, when the costs of AWR compliance for a candidate are compared with the amount spent in recruiting multiple candidates for shorter amounts of time, data shows that this approach is actually costing employers more money.

The Swedish Derogation model was once raised as a possible means to minimising the impact of the AWR and we are pleased to see that few clients were distracted by or took up this approach to managing their temporary labour needs.

Confusion around key elements remains

Unfortunately, confusion remains around some key elements of the AWR and this has the potential to affect compliance levels and, as a result, increase the risk to organisations of using temporary labour. For example, 64% of all enquiries that Comensura received in the past year were regarding comparative data when assessing the benefits for temporary employees who pass the 12-week mark. Twenty-three per cent were questions regarding differing interpretations of the Regulations.

Key points to aid compliance

From a legal perspective, compliance with the Regulations is fundamental to reducing the chance of employment tribunal claims. To remain compliant in the context of the AWR, employers are advised to:

  • Be clear on entitlements. Covering such areas as holidays and overtime rates, HR teams need to be clear and up to date on how entitlements are managed according to the AWR. Critically, this means that HR, procurement and line managers need to communicate more so that they are sharing information and getting entitlements right. Hopefully, an increase in communication will avoid the need for involvement from the legal team.
  • Appoint an “owner” of AWR. We have found that an internal owner or sponsor of AWR, such as HR or procurement, means that issues get resolved more quickly. If ownership of compliance with AWR isn’t set up in your organisation, you should organise this now.
  • Support your line managers. While we have found that most HR and procurement teams are very clear on the Regulations and how to comply, line managers need more support in this area. It is important that line managers are aware of the requirements raised by the AWR and the risks of not meeting those requirements.
  • Know how to manage risk. When it comes to parity of entitlements and pay, line managers need the right advice. People trained internally on AWR should be thinking both about compliance but also risk management to avoid future disputes or legal challenges from employees. While HR and procurement functions play a significant role in managing these risks, in some situations, legal experts will need to be briefed to prepare for the possibility of any claims.
  • Carefully manage the flow of data. If I were to make a single recommendation to ensure AWR compliance, it would be to maintain the flow of data. If your recruitment supplier is unaware of the benefits your existing employees are eligible to, they will struggle to ensure parity for longer term temporary employees. Ensuring that your suppliers, HR and procurement team have this data will avoid confusion and maintain compliance.

While the AWR have not led to a lot of legal action by contractors claiming unfair treatment, using alternative “solutions” to avoid the Regulations or failing to maintain compliance creates undue risks for employers. With the right advice and good communication, organisations can maintain compliance with the AWR and in a way that makes good financial sense for both employers and employees.

Jon Milton is business development director at Comensura

FAQs on the Agency Workers Regulations from XpertHR:

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