3. AWR – A reminder of the basics…
AWR Will give agency workers the right to the same basic working
and employment conditions they would receive if they were
engaged directly by an end user hirer to do the same job.
Calculating the 12 week qualifying period
Day 1 rights
What does Pay Include:
What does Pay Exclude:
4. AWR – A reminder of the basics continued…
Definition of the new hirer
Is it a Substantially different role
Liabilities & Remedies
5. Agency Worker Regulations
• Qualifying week landed 26th December (Over 100 days since AWR
came into force)
• Resulted in no significant flurries of queries and requests for
information from workers ( eResponse have had 4 temporary workers
request further information so far out of a 400 temp count )
• In every case raised there has been no further action
• No specific bodies such as employment agencies Standards
Inspectorate (Part of BIS) or GLA tasked with monitoring that
businesses are complying with the regulations.
• The regulations will be enforced by individuals making claims through
employment tribunals.
7. Services Portfolio
Models and Supply Types
• Standard way (No change)
• Training grades (French Extension)
• Swedish derogation
• Managed Service
• Department Outsource (Temp Only
Zones)
8. Services Portfolio
The Standard Way…
•Establish a Comparator or identify what the hirer would pay
if the individual (s) was recruited directly to do the same job
•Complete information request details form
9. Services Portfolio
Training grade – French Extension
This option involves end users implementing a “training grade”
for all new starters, whether they are temporary or permanent
workers.
This model is a common model in France where for example the 1st
12 months of any new workers employment / engagement, they
receive lower pay and fewer benefits because they are being
trained
10. Services Portfolio
The Swedish Derogation
Regulation 10 provides an option for temporary work
agencies to be exempt from the requirement to provide
parity of pay (As defined) to agency workers under the
Regulations, known as the “Swedish Derogation”.
Pay between assignments – Minimum of 4 weeks
11. Services Portfolio
Managed Service
This Option aims to lift the labour provider out of the definition of
“Temporary work agency” Under the regulation 4 defined as (Our
Emphasis):
“A person engaged in the economic activity, public or private, whether or
not operating for profit, and whether or not carrying on such activity in
conjunction with others, of:
a) Supplying individuals to work temporarily for and under the
supervision and direction of hirers; or
b) Paying for, or receiving or forwarding payment for, the services of
individuals who are supplied to work temporarily for and under the
supervision and direction of hirers.”
12. Services Portfolio
Department Outsource (Temp Only Zones)
This is where a business has a “Temp only Zone” and is used
in many cases where a company works with big peaks &
troughs and as a result is easier to flex Temporary Workers as
and when necessary
14. Implementation & Myths
• Sharing information – A Potential Problem
• Its end of Temporary Labour!!
• Its no longer viable to use temporary labour!!
• Limited company Contractors (The genuinely self
employed!!!!)
REC/KPMG shows strong
demand for flexible staffing!
65% of employers have
made no changes in the
way they use Temporary
Labour!
15. eResponse Systems & Compliance
Accruing holiday pay
Calculating the 12 weeks
Terms Of Business Update
17. Customers Perspective
Extra Burden?
•Something Else to Consider
•Pay grades disclosed
On-going Economic Uncertainty continues to influence
hiring patterns. Temporary & Contract staff continues to
provide an attractive option and a means of bringing in
the right skills at very short notice
84% are planning to grow or
keep their existing Agency
workforce levels the same
Day 1 rights – Canteen / Workplace creche / transport services – local pick up and drop offs or transport between sites / toilets shower facilities / staff common room / prayer rooms / food & drink machines & car parking. Day 1 rights are the sole responsibility of the hirer. Relevant terms & conditions are: Pay Duration of working time Night work Rest periods Rest breaks Annual leave What does Pay Include : Basic pay / overtime payments / Shift or Unsocial allowances / risk payments for hazardous duties / Payment for annual leave / bonus payments / vouchers or stamps which have a monetary value What does Pay Exclude : occupational sick pay / Occupational pensions (AW will be covered by new automatic pension enrolment / occupational maternity / paternity or adoption pay / Redundancy (statutory & Contractual) / Notice pay (Statutory or contractual linked to loss of employment) / Advances in pay or loans / Expenses such as accommodation & travel expenses & Payments or rewards linked to financial participation schemes such as Bonuses related solely to company performance Majority of benefits in kind given as an incentive or reward for long service
The qualifying clock will be re-set to zero if the agency worker stops working for 1 hirer and starts with another If the hirer has multiple sites then moving from 1 site to another wont be enough unless the role is substantively different If each company has its own identity then the clock will reset. Substantively different Role has to be different for the clock to restart – a good test would be Are the different skills & competences used Is the pay rate different Is the work in a different location Is the line mgr different Are the working hours different The role requires extra training Is different equipment used. Examples – moving a worker from a production line to s packing role requires little training & uses the majority of the same skills If a production worker moves from a production line to admin the clock would restart. Liabilities & Remedies Liability rests with the hirer for day 1 rights. The TWA will not be held liable because they do not have a role in delivering these entitlements. For failure to provide basic working & employment conditions liability can rest with either the TWA or the hirer or both and even if the TWA is initially responsible for a breach of equal treatment principle it will be a defence if it can show it took “resonable steps” to obtain relevant information. If the TWA can establish this defense then the hirer will become responsible. If the hirer fails to provide correct information then this could also be a breach and the hirer could end up being solely responsible. It is in the interest of all parties to exchange information in a timely manner. Good practice will also be for TWA to put in place reminders to check there is no changes to the terms and conditions.
No change to how labour is provided here, however it is important that TWA and the hires agree pay parity and equal terms and conditions.
This option involves end users implementing a “training grade” for all new starters, whether temporary or permanent workers. This model is a common model in France where for example the 1 st 12 months of any new workers employment / engagement, they receive lower pay and fewer benefits because they are being trained Agency workers are entitled, under Regulation 5 (1), to: “ The same basic working and employment conditions as [they] would be entitled to for doing the same job had [they] been recruited by the hirer: (a) Other than by using the services of a temporary work agency; and (b) At the time the qualifying period commenced.” The comparator using this option could be a permanent employee on the training grade, carrying out the same or broadly similar work as the agency worker. The agency worker would only be entitled to the same lower rate of pay and limited benefits as the permanent new starters subject to the training grade The effect of this is that: The agency workers rights are still subject to the 12 week qualifying period After this 12 week period, the agency worker has the right to the same basic working conditions as the permanent employee who are on the training grade This would continue until the period for the training grade comes to an end, after which the worker is entitled to the same basic working and employment conditions as comparator employees who have completed their training period Note: The qualifying period and the training period will run concurrently, meaning that this model is only effective if the training period is longer than 12 weeks. This is because regulation 5(1) states that the worker is entitled to the same basic working and employment conditions as if they had been recruited at the time the qualifying period commenced, at which point they would have been subject to the training grade.
Regulation 10 provides an option for temporary work agencies to be exempt from the requirement to provide parity of pay (As defined) to agency workers under the Regulations, known as the “Swedish Derogation”. Regulation 10 sets out a number of requirements that must be met by the Temporary Work Agency if it intends to rely on the exemption, including the need to employ the agency worker on a permanent contract of employment and to pay the agency worker between assignments. Pay between assignments – Minimum of 4 weeks Regulation 11 sets out how to calculate the minimum rate of pay to be paid to the agency worker when she/he is not working. This must be at least 50% of the pay paid to the agency worker in the “relevant period,” but this amount cannot be less than the applicable National Minimum Wage rate. The 50% pay rate will be applied against the week or month (depending on whether the agency worker is paid weekly or monthly) in which the temporary worker had his or her highest earnings in the 12 weeks prior to the date that the previous assignment ended. For the purposes of calculating the rate payable, only payments in respect of basic pay (i.e. annual salary, payments for actual time worked or by reference to output) are taken into account. Any bonus payments made during the relevant period are excluded. The National Minimum Wage floor As stated above, the 50% pay rate is subject to a condition that it cannot be less than the applicable National Minimum Wage. This restriction will have a disproportionate effect in sectors that have hourly rates of pay close to the National Minimum Wage.
Best Suited to: Not Suitable For: This Option aims to lift the labour provider out of the definition of “Temporary work agency” Under the regulation 4 defined as (Our Emphasis): “ A person engaged in the economic activity, public or private, whether or not operating for profit, and whether or not carrying on such activity in conjunction with others, of: Supplying individuals to work temporarily for and under the supervision and direction of hirers; or Paying for, or receiving or forwarding payment for, the services of individuals who are supplied to work temporarily for and under the supervision and direction of hirers.” The managed service option involves altering the business model of the labour provider so that it is providing a managed service rather than acting as a temporary work agency. Effectively, the new structure would mean that workers are no longer working “temporarily for and under the supervision and direction of hirers” as is required under regulation 4 Tribunals are likely to look beyond attempts to avoid the Regulations through bogus arrangements, so labour providers should be able to demonstrate they are genuinely a managed service, for example by: Fully training and supervising the workers Subjecting the workers to their disciplinary policy Organising the workers shift patterns, rotas, cover and attendance recording Managing pay, bonuses, holidays and other benefits.
This is where a business has a “Temp only Zone” and is used in many cases where a company works with big peaks & troughs and as a result is easier to flex Temporary Workers as and when necessary. In this situation the comparator would be difficult to establish as there wouldn’t be one and therefore the business would “treat the worker as if he or she had been recruited directly to do the same job”. The business would identify the same basic working and employment conditions as the Temporary Worker. As the business would use the same pay and working conditions for a Temporary Worker and a Permanent Worker, the business would not have to pay any extra in terms of higher rates of pay, holiday etc, as these would be the same. This has been a popular option for businesses over recent months that engage Temporary staff for the majority of their shop floors, call centres etc. By having this flexibility a company is able to enjoy the cost saving that comes with flexing the workforce when needed.
Customers not keen on sharing information which can result in not paying the correct rates Paying a Bonus/Commission! (Only if directly attributable to the amount or quality of work done by the individual) Bonuses that are not directly linked to the contribution of the individual e.g. flat rate bonus that is given to all direct recruits to encourage loyalty or long term service.
We have both options to pay additional into the hourly rate or bank the extra accrual MM calculating qualifying weeks TOB change involving the equal pay -
The latest jobs outlook from the Recruitment & Employment Confederation & KPMG confirms that a high proportion of employers end up taking on temporary staff permanently. The ability to take staff on tried and tested is one of the benefits of agency work which the AWR does not affect. There is something else to consider when organising labour Think about pay grades.
When asked specifically about AWR 65% of employers said that they had not made any changes in the way they use agency workers since the new regulations came into force. 32 % have made some changes & 3% were not sure. 84 % of employers are planning to either grow or keep their agency work force at existing levels. Within this 27% are planning to actually increase temporary staff. Only 16% of employers are planning any decrease which leaves a + 11% positive trend. eResponse is 20% up on temporary workers out working compared with the same period in 2011. We are finding that more companies are flexing labour all of the time to suit the peaks and troughs of the business
