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Blake Lapthorn Agency Workers Regulations seminar for recruitment companies - 8 September 2011
 

Blake Lapthorn Agency Workers Regulations seminar for recruitment companies - 8 September 2011

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Blake Lapthorn Agency Workers Reg

Blake Lapthorn Agency Workers Reg

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    Blake Lapthorn Agency Workers Regulations seminar for recruitment companies - 8 September 2011 Blake Lapthorn Agency Workers Regulations seminar for recruitment companies - 8 September 2011 Presentation Transcript

    • The Agency Workers Regulations Are you ready for 1 October 2011?Seminar for recruiters and other suppliers 8 September 2011 Bridget Wood, Head of Recruitment sector group bridget.wood@bllaw.co.uk 020 7814 5426 Stephanie Slanickova, Senior solicitor stephanie.slanickova@bllaw.co.uk 020 7814 5422
    • Overview Introduction Who is an “agency worker” and what is a “temporary work agency”? Who falls within the scope of the Regulations and who falls outside? What new rights will “agency workers” have? Who is liable for breaches of the Regulations and what are the penalties? Possible workarounds Implications for end users Implications for recruiters and other suppliers Practical tips for staying ahead Conclusions Any questions
    • Introduction Part-time workers and fixed-term employees already have equal treatment rights under UK Regulations which implement EU Directives The aim of the European Agency Workers Directive was to extend this principle to agency workers The Agency Workers Directive became European law in December 2008 UK to implement within three years
    • Introduction The Agency Workers Regulations 2010 were laid before Parliament on 21 January 2010 The Agency Workers (Amendment) Regulations 2011 were laid before Parliament on 3 August 2011 BIS published revised final guidance on the Regulations on 27 May 2011 - additional guidance for teaching agencies published in August 2011 The BIS Guidance provides important clarification of the Regulations but is not a statement of the law – ultimately for courts to interpret
    • Introduction The Agency Workers Regulations give agency workers the right to equal treatment with regards to “basic working and employment conditions” once they have completed a 12 week qualifying period – to be provided by “temporary work agencies” “Day 1” rights to be provided by end users The Regulations come into force on 1 October 2011
    • The Agency Workers Regulations 2010:what the Regulations say Who is an “agency worker” and what is a "temporary work agency“? Who falls within the scope of the Regulations and who falls outside? What are the new rights of agency workers? Who is liable for breaches of the Regulations and what are the penalties?
    • Who is an “agency worker”? An agency worker: – is supplied by a “temporary work agency” – to work temporarily for and under the supervision and direction of the client/end user (Regulations use term “hirer” for client/end user) AND – has a contract of employment with the temporary work agency or any other contract with the agency to perform work or services personally (n.b. new definition)
    • What is a “temporary work agency”? A temporary work agency: – supplies individuals to work temporarily for and under the supervision and direction of hirers/clients OR – pays for, or receives or forwards payment for, the services of individuals who are supplied to work temporarily for and under the supervision and direction of hirers/clients Worker can be an “agency worker” even if he or she works through an intermediary Agency workers cannot contract out or “opt out” of the Regulations
    • Who falls within the scope of theRegulations? (examples) Hirers (= clients/end users) Recruitment agencies which supply individuals to work temporarily for and under the supervision and direction of clients Organisations which pay for or receive or forward payment for the services of those individuals Individuals supplied per supply model above Intermediaries (and their workers/employees), such as umbrella companies, master vendors and neutral vendors
    • Who falls outside of the scope of theRegulations? (examples) Individuals who find direct employment with the client Agencies when they provide direct employment services (permanent and/or fixed term) In-house temporary staffing banks Secondment arrangements
    • Who falls outside of the scope of theRegulations? (examples) Genuinely self-employed where the status of the hirer/client or the agency is that of a client or customer of a profession or business undertaking carried on by the individual, eg solicitors, locum doctors, company contractors (nb not automatic) Service providers engaged on “managed service contracts” are excluded as are the individuals working on those managed service contracts (eg IT, catering services) Dispute as to who is within or outside scope? Ultimately Employment Tribunals will decide
    • What new rights will agency workers have?IMPORTANT: The new rights under the Regulations are in addition to existing rights, eg equality laws, data protection, National Minimum Wage, Working Time Regulations
    • What new rights will agency workers have? Rights After 12 weeks Day 1 (can be restarted/ paused/continued)Collective Facilities Access to Vacancies Equal Treatment and Amenities
    • Day 1 rights “Day 1” rights to be provided by the client (not subject to the 12 week qualifying period – i.e. from the first day of any assignment which begins on or after 1 October 2011) Agency worker has the right to be told of any relevant vacancies with the client during their assignment in order to be given the same opportunity as a comparable employee or worker to find permanent employment with the client Entitlement to notice of client’s permanent vacancies – agency workers should know where and how to access vacancies, e.g. notice board, intranet, induction packs – no requirement to advertise staff re-deployment roles in redundancy or restructuring situation – BIS Guidance: clients are not constrained regarding requirements for qualifications or experience
    • Day 1 rights Access to client’s “collective facilities and amenities” (unless less favourable treatment is justified on objective grounds) – canteen or other similar facilities – childcare facilities – transport services – for example, local pick-up service, transport between sites – workplace crèche – toilet/shower facilities – staff common room – waiting room
    • Day 1 rights Access to client’s “collective facilities and amenities” (continued) – mother and baby room – prayer room – food and drinks machines – car parking NB list above is non-exhaustive, no enhanced rights, excludes benefits to reward long-term service or loyalty Treatment must be no less favourable than comparable employee or worker directly employed or engaged by client
    • Day 1 rights Access to client’s “collective facilities and amenities” (continued) – Less favourable treatment may be “objectively justified” – Unlikely that cost alone will be enough – Practical and organisational considerations – Consider offering access to facilities and amenities on a pro rata basis as an alternative to completely excluding them
    • Rights after 12 week qualifying period Entitled to “equal treatment” after a 12 week qualifying period Must work in the same role with the same client for 12 calendar weeks Any week during which the agency worker works is counted Break of more than six calendar weeks between assignments in order for the 12 week clock to be restarted except in certain circumstances Multiple clients and multiple agencies
    • Calculating the 12 week qualifying period Qualifying clock is reset to zero: – New assignment with a new hirer/client – Same hirer/client but a new assignment which is “substantively different” – Same hirer/client but a break of more than six calendar weeks between assignments Qualifying clock is paused: – Break for any reason of six calendar weeks or less and a return to same role with same hirer/client – Break for the purpose of taking leave to which the agency worker is entitled, including annual leave – Break of up to 28 weeks due to sickness or injury or jury service – Regular and planned shutdown in workplace – Industrial action at client’s establishment
    • Calculating the 12 week qualifying period Qualifying clock continues to tick: – Pregnancy, childbirth or maternity: during pregnancy and up to 26 weeks after childbirth – Adoption leave or paternity leave Anti-avoidance provisions – Aimed at preventing obvious avoidance
    • What rights will agency workers have afterthe 12 week qualifying period? An agency worker will be entitled to the same “basic working and employment conditions” as he/she would have been entitled to for doing the same job had he/she been directly recruited by the client as an employee or worker
    • What rights will agency workers have afterthe 12 week qualifying period? “Basic working and employment conditions” are: – pay (see next two slides) – duration of working time – night work – rest periods and breaks – annual leave “Overall package” being the same is not a defence After 12 week qualifying period, pregnant workers have a right to time off for ante-natal care Pregnant women and new mothers have additional new rights
    • What rights will “agency workers” have afterthe 12 week qualifying period? What will “pay” include? – basic pay – paid holiday (above Working Time Regulations entitlement if that is what a comparable direct hire is contractually entitled to) – payment of overtime (subject to qualifying conditions being met) – shift/unsocial hours allowances – risk payments for hazardous duties – vouchers or stamps with a monetary value, eg luncheon and childcare vouchers – bonus or commission payments directly attributable to the amount or quality of the work performed by the agency worker, eg commission linked to sales targets
    • What rights will “agency workers” have after12 week qualifying period? What will “pay” not include? (examples) – payment in respect of maternity, paternity or adoption leave – financial participation schemes such as share participation and profit sharing – occupational sick pay – occupational pensions – redundancy payment – benefits in kind such as health insurance – bonuses based on organisational performance and those designed for long-term motivation and retention of staff – further examples: see BIS Guidance The additional experience and qualifications of the comparable direct hire can be taken into account and justify why the pay rate of the agency worker is lower
    • Liability and penalties Protection from detriment The Regulations will be enforced through Employment Tribunals Crucial to have internal complaints procedures in place for workers to express concerns about equal treatment The agency has a potential defence – if it has obtained or taken reasonable steps to obtain relevant information from the client AND has acted reasonably in determining the basic working and employment conditions AND has treated agency worker accordingly The Employment Tribunal will apportion liability and any financial sanctions between the agency, the client and any intermediaries
    • Liability and penalties Agency worker can bring a claim for breach of the Regulations within 3 months of the alleged breach Employment Tribunal can make a declaration, order payment of compensation and make recommendations for action Employment Tribunal can award compensation of not less than two weeks’ pay as well as any expenses or other losses incurred Compensation of up to £5,000 can be awarded for breach of anti-avoidance provisions
    • Liability and penalties No cap on compensation Other “costs” – reputation – management time – stress – relationships between recruiters and clients How evidence is gathered – beware emails, telephone calls: always act professionally – beware data subject access requests
    • Possible workarounds Do workarounds need to be considered? Assignments of less than 12 weeks – concerns about agency worker turnover? – beware anti-avoidance measures “Margin only” assignments direct with end user – headcount issues? In-house temporary staffing banks – staff must only work for the business that employs them
    • Possible workarounds “Swedish” derogation – agency workers with permanent contract of employment with the temporary work agency are not entitled to equal pay – paid between assignments for an aggregate of at least four weeks before contract can be terminated – not less than 50% of highest level of basic pay and at least National Minimum Wage – other conditions that must be satisfied – entitled to all the other rights under the Agency Workers Regulations
    • Possible workarounds Self-employed contractors – use the usual tests of self-employment – see Directgov link in the BIS Guidance “Project” basis without end user client “supervision or direction” – paid for delivering pre-scoped deliverables – substitution rights: not personal service
    • Implications for end users Administrative burden – recruiters will need to work with their end user clients to assess whether workers supplied are within scope – if within scope, compile data about pay and other working conditions and establish the correct rate of pay and other working conditions to which each agency worker is entitled – calculating the 12-week qualifying period
    • Implications for end users Higher cost of agency workers? – widely reported concerns that costs will increase, but depends on the type of agency workers engaged – highly paid professional/technical agency workers? – lower paid agency workers? – cost of providing “day 1” rights?
    • Implications for end users Claims against end users? – if an agency worker brings a claim and the recruiter can show that it took “reasonable steps” to obtain relevant information from the end user and acted reasonably in determining what the agency workers basic working and employment conditions should be at the end of the 12-week qualifying period, the end user will be liable to the extent there is a breach of the Agency Workers Regulations – end user client will be liable for failure to meet its obligations to put in place “day 1” rights
    • Implications for end users Concerns about providing pay data on comparable direct hires to recruiters? Request confidentiality and non-poach undertakings from recruiters Will be asked by recruiters to sign new contracts or agree contract amendments or will want to amend their own terms
    • Implications for end users New contract terms are likely to include: – obligations on end user client to provide information on the basic working and employment conditions of comparable direct hires – potential fee increases – confidentiality and non-poach undertakings from recruiters – indemnities – ensure appropriate risk apportionment
    • Implications for recruiters and othersuppliers Costs will all be passed on to recruiter? – increased pay rates will be deducted from recruiter’s margin? unfair burden - negotiate! – cost of comparator exercise will be borne by recruiter? – end users will ask for indemnities? Recruiters and other suppliers will have to request “comparator” information: – if commercially sensitive: offer confidentiality and non-poach undertakings to end user clients? – offer “comparator consultancy” as a value add? – chance for recruiters to build deeper relationships with end user clients? – contract terms will need to be re-written
    • Practical tips for staying ahead Educate and allay the fears of your end user clients Understand each client’s business and assess the impact of the Regulations on their business – review each client’s use of temporary contract workers – identify who is and who is not within scope – break down those within scope by skill sets and pay grades – assess what “equal treatment” will entail – formal pay bands: compare the current pay rates of agency workers with entry level rates at the client – no formal pay bands: look at pay rates of existing staff doing the same or similar work for the client – assess any cost impact – assist clients to consider amending salary bandings and bonus schemes
    • Practical tips for staying ahead Is the likely cost impact significant? If so, agree pricing with relevant clients and/or consider workarounds Put new contracts in place or amend contracts where necessary with appropriate agreement on risk apportionment and any increased payments, confidentiality and non-poach provisions
    • Practical tips for staying ahead Train your staff on the Agency Workers Regulations and put in place appropriate processes and systems Develop an internal process to collect information from clients on the basic working and employment conditions that would apply if agency workers were recruited directly Establish a procedure for passing this information on to any agency workers who may request this information
    • Practical tips for staying ahead Assist clients with tracking the use of agency workers in the same role to establish when the 12-week qualifying period is completed and develop an internal process to collect this information Similarly, collect information from candidates on whether they have worked previously in the same role with the same client
    • Practical tips for staying ahead Help clients make any necessary changes to give agency workers access to: – their collective facilities and amenities such as canteen, crèche, on-site gym, transport facilities – relevant permanent vacancies within their business, for example, by extending intranet access Inform agency workers of their new rights and entitlements and ensure that they know whom to go to in your organisation with any queries or concerns Put in place a “complaints procedure” for agency workers
    • Conclusions The Agency Workers Regulations 2010 (as amended) will be law from 1 October 2011 Read the BIS Guidance for clarification of how the Regulations are intended to work Do not panic - beware scaremongering – unlikely to apply to all agency workers and little effect in many cases If not already done, impact assessments are the key immediate step
    • Any questions
    • The Agency Workers Regulations Are you ready for 1 October 2011?Seminar for recruiters and other suppliers 8 September 2011 Bridget Wood, Head of Recruitment sector group bridget.wood@bllaw.co.uk 020 7814 5426 Stephanie Slanickova, Senior solicitor stephanie.slanickova@bllaw.co.uk 020 7814 5422