Agency Workers Regulations
FCSA has been an active campaigner on all things AWR in the last 12 months. This has included actively engaging with, and working alongside the Department of Business, Innovation and Skills to help shape the final legislation and subsequent guidance, as well as helping all those involved in the supply of temporary labour and the 1,000s of British businesses that rely on the professional flexible workforce in the UK, get to grips with it.
While the AWR does bring with it new risks, these can, with a bit of planning, be mitigated by UK PLC and with that comes opportunities that could give businesses that utilise flexible workers a competitive advantage.
UK companies can still tap into an experienced and skilled flexible workforce and contractors. They will broadly have three options:
- Work via an umbrella company that offers full employment for the contractor (also known as the Swedish Derogation model)
- Work via an umbrella company offering a ‘match permanent pay’ model (with the full employment rights)
- Work via their own limited company.
The AWR is essentially about making sure that temporary or agency workers in the UK have access to the same pay and basic employment conditions as their comparable permanent equivalent. A lack of action from the hirers of temporary workers will only increase the risk of costly employment tribunals that also damage the reputation of both the client and agency involved and many trade unions will be actively looking to support members in bringing cases to tribunal with little or no risk to the worker.
This has been where the FCSA and its members have been particularly effective. Creating a framework for professional freelancers and contractors to continue to offer their services in the UK and market their skill set and experience to UK PLC whilst ensuring compliance and risk mitigation for the agencies that place them and the hirers that rely on their services.
And, with legislation such as the AWR on the horizon, the need for smart risk mitigation in the recruitment sector has never been more pertinent although this will mean some fundamental changes from all parties in the supply chain.
Comply not deny
It is our view that the AWR legislation is one that industry needs to comply with rather than seek to create artificial structures to avoid. Good service providers will talk about working within the rules, not around them and this is something we ultimately believe will be achievable. In terms of who is and isn’t within the scope of the AWR, it’s worth noting that the majority of professional freelancers and contractors, ones who are engaged by an end client on the basis of their particular skill set or experience, are largely paid more than any permanent equivalent, which therefore makes the AWR largely irrelevant.
However, in a nutshell, we believe that umbrella workers will definitely be caught by the AWR, as will limited company contractors who are under the supervision and direction of the hirer. Contractors who are not supervised and directed by the hirer (in practice) will be outside of the legislation.
The FCSA Code has been designed to be the most robust and comprehensive in existence, conducted independently by one of the ‘big four’ accountancy firms, it is the only industry Code that has the backing and support of APSCo and the other industry bodies in our space.
The challenging audit and the fact it covers areas such as company finances, employment contracts and expense processing, to name just a few, means that it goes way beyond any other audit in the market, with HMRC receiving all the subsequent documentation, transparency and compliance in its truest form. We are extremely grateful to HMRC for the advice they provided when we established that code of conduct in 2009.
One important point to take from all of this is that if you have the right supply chain in place, with correctly structured, transparent and compliant service providers, the AWR is not such an onerous thing.
If the industry gets this wrong, then a lot of time and money will be wasted as it moves to the courts and employment tribunals to sort this out. Sensible discussion now, before its introduction, will ensure that all parties in the temporary labour market can develop a robust solution in order to work within the legislation and ensure that freelancing remains a profitable option for professionals and a valued service for businesses.
To learn more about AWR and the FCSA framework please Contact Us today.