Awr strategy development presentation


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In 2011 the new Agency Workers Regulations (AWR) will come into force in the UK. These will give contract / freelance workers many of the same day one rights as direct hires. Are you aware of these changes and how they might impact on your business? This presentation looks at the new law, its impact on UK businesses and what you need to do to make yourself compliant.

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  • BIS is good guidance on facilities – identify those within scope – generally on-site, and provided by the client. Pinpoint areas where equal access may be difficult.
  • Accurate comparison: take account of qualifications, experience Where the terms match the hirer and TWA will be deemed compliant.
  • Conduct of claimant and respondent Action?
  • Internal procedures – changing how ltd co contractors are treated; information flow; contract docs – PBA; ltd co
  • Awr strategy development presentation

    1. 1. AWR: Strategy Development Presented by Samantha Hurley APSCo 28 th September 2011
    2. 2. Outline <ul><li>Overview of AWR & new rights </li></ul><ul><li>Who is liable </li></ul><ul><li>Who is inside & outside of Scope </li></ul><ul><li>Pay between assignments model (Swedish derogation) </li></ul><ul><li>Impact and risk assessment approach </li></ul><ul><li>Key Points for strategy development </li></ul>
    3. 3. Overview of AWR <ul><li>Purpose: to give the same basic working & employment conditions as if engaged directly </li></ul><ul><li>1 st October 2011 – not retrospective </li></ul><ul><li>Designed to protect vulnerable workers </li></ul><ul><li>Doesn’t confer full employment rights </li></ul><ul><li>Provides new “Agency Worker” employment status </li></ul>
    4. 4. Day One Rights <ul><li>Equal access to: </li></ul><ul><ul><li>collective facilities & amenities ; and </li></ul></ul><ul><ul><li>information about relevant vacancies . </li></ul></ul><ul><li>These are not enhanced access rights. </li></ul><ul><li>Less favourable access may be objectively justified </li></ul>
    5. 5. Equal Treatment Rights <ul><li>12 week qualifying period </li></ul><ul><ul><li>breaks either reset, pause, or continue QP </li></ul></ul><ul><ul><li>same role, same hirer </li></ul></ul><ul><li>Same or substantively similar role </li></ul><ul><li>Agency worker informed of new role </li></ul><ul><li>Same hirer – dependent upon legal entity </li></ul><ul><li>Structure of assignments </li></ul>
    6. 6. Equal Treatment Rights <ul><li>After 12 week qualifying period </li></ul><ul><li>Basic working & employment conditions only </li></ul><ul><li>Treat “as if” recruited directly to same role </li></ul><ul><li>Can compare to pay scales, relevant collective agreements, established practice </li></ul><ul><li>Can make comparison between AW & existing employee doing broadly similar work </li></ul><ul><li>Unique roles </li></ul><ul><li>AW still entitled to relevant terms, which generally apply in the workplace </li></ul>
    7. 7. Equal Treatment Rights <ul><li>Basic conditions: pay ; duration of working time; night work; rest periods; rest breaks; & contractual annual leave (above statutory entitlement) </li></ul><ul><li>Pay includes: </li></ul><ul><li>basic pay; overtime payments; shift/unsocial hours allowances </li></ul><ul><li>holiday pay </li></ul><ul><li>bonus/commission attributable to work done </li></ul><ul><li>vouchers/stamps with a monetary value </li></ul>
    8. 8. Equal Treatment Rights <ul><li>Pay excludes: </li></ul><ul><li>occupational: sick pay; pensions; maternity, paternity, or adoption pay; financial participation schemes </li></ul><ul><li>redundancy or notice pay (statutory or contractual) </li></ul><ul><li>advances in pay, or loans </li></ul><ul><li>expenses </li></ul><ul><li>the majority of benefits in kind </li></ul><ul><li>bonuses not linked to work done </li></ul>
    9. 9. Pregnancy & Maternity Rights <ul><li>Right to take paid time off for ante-natal appointments </li></ul><ul><li>Right to be offered alternative work, where assignment is terminated for H&S reasons </li></ul><ul><li>Right to be paid for the intended duration, or likely duration of the assignment </li></ul>
    10. 10. Liabilities & Remedies <ul><li>Who is liable in the event of a claim: </li></ul><ul><li>Client liable for Day 1 entitlements </li></ul><ul><li>All parties potentially liable to the extent they’re responsible </li></ul><ul><li>Compensation award: minimum of two weeks pay, no maximum </li></ul><ul><li>Award can be reduced to what is just and equitable </li></ul><ul><li>Additional awards of up to £5,000 where assignment(s) structured to avoid qualifying period </li></ul><ul><li>Failure to respond to information requests – tribunal could draw adverse inference </li></ul>
    11. 11. Who is Within Scope <ul><li>Temporary Work Agency definition is wide: includes recruitment firms, umbrellas & other intermediaries supplying staff temporarily under the supervision & direction of [clients] </li></ul><ul><li>An Agency Worker is supplied by TWA to work temporarily under the supervision and direction of the [client], & has personal service contract with TWA, includes PAYE temps & umbrella contractors </li></ul>
    12. 12. Umbrella Workers <ul><li>Umbrella workers could be outside of scope if no client supervision & direction </li></ul><ul><li>Otherwise umbrella workers will be within scope. </li></ul><ul><li>Low risk supplies: </li></ul><ul><ul><li>AW earns equal/more than comparable perm </li></ul></ul><ul><ul><li>No significant bonuses within scope </li></ul></ul><ul><ul><li>Client holiday entitlement close to statutory </li></ul></ul><ul><li>May be offered a PBA model to take worker outside of scope – it doesn’t </li></ul>
    13. 13. Pay Between Assignments Model (Swedish Derogation) <ul><li>Only likely to be useful where substantial pay differential </li></ul><ul><li>Exemption from equalisation of “Pay” only </li></ul><ul><li>All other equal treatment & day 1 rights remain </li></ul><ul><li>Regulations ambiguous - compliant model unclear - often low cost = high risk </li></ul><ul><li>If found not to be compliant, the AW will have right to equal Pay </li></ul><ul><li>TWA/client could be liable if enforced the model and/or refused any funding </li></ul><ul><li>Risk likely to increase in unionised environment </li></ul>
    14. 14. Who is Out of Scope <ul><li>BIS guidance suggests the following will not be agency workers: </li></ul><ul><ul><li>genuinely self-employed – no client supervision, no personal service, & TWA/client are client/customer </li></ul></ul><ul><ul><li>Managed Service Contracts – supplying service rather than staff, supervised by TWA </li></ul></ul><ul><ul><li>working for in-house temporary staffing banks </li></ul></ul>
    15. 15. Managed Service Contracts <ul><li>Service provider must genuinely supervise and direct its workers </li></ul><ul><li>If client determines the manner in which services delivered then probably in scope </li></ul><ul><li>On-site presence alone unlikely to be sufficient </li></ul><ul><li>If service provider engages workers through another TWA, then in scope. </li></ul><ul><li>Terms that apply dependent upon where supervision lies. </li></ul>
    16. 16. Limited Company Contractors <ul><li>BIS: simply putting earnings through a limited company won’t put individuals beyond possible scope </li></ul><ul><li>They are likely to remain in scope where: </li></ul><ul><ul><li>client is not a client/customer </li></ul></ul><ul><ul><li>client has supervision & direction of AW </li></ul></ul><ul><li>A tribunal will look at the reality of the situation </li></ul><ul><li>LC Contractors outside IR35 unlikely to claim </li></ul><ul><li>Encouraging individuals into inappropriate supply models or making it the only option is risky </li></ul><ul><li>Also increased risk under Managed Service Company tax debt transfer legislation </li></ul>
    17. 17. Determining Supply Model <ul><li>Look at worker’s history: </li></ul><ul><ul><li>Length & consistency of professional contracting career, and tax status </li></ul></ul><ul><li>Does the role lend itself to Ltd Co. model? </li></ul><ul><li>Review procedures: supervision of contractors </li></ul><ul><li>Does client contract include flexibility to allow self-employed contractors? </li></ul><ul><li>Would a deliverables based contract (rather than T&M) be appropriate? </li></ul>
    18. 18. Impact & Risk Assessment Partnership Approach Impact Assessment Information Gathering Process – understand scale & structure of usage; identify high risk usage, & other risk factors; assess supply models Risk Analysis Determine risk level & cost of supply models: probability v. severity; identify medium & high risks; identify cost & risk of possible alternative Implementation Strategy New supply models; revised internal procedures; communication; review of contractual documentation; training
    19. 19. Impact Assessment Information to Identify <ul><li>current supply model: LC contractor, Umbrella, PAYE </li></ul><ul><li>typical assignment length and pattern </li></ul><ul><li>length & pattern of breaks between assignments </li></ul><ul><li>“ as if” terms, or identifiable comparable employee </li></ul><ul><li>established/formal pay scale/collective agreements </li></ul><ul><li>basic terms & conditions at the workplace </li></ul><ul><li>bonuses/commissions – are they within scope of “pay”, already reflected in worker’s pay rate? </li></ul><ul><li>annual leave entitlements </li></ul><ul><li>union presence </li></ul><ul><li>performance appraisal systems to calculate pay/bonuses </li></ul><ul><li>“ day 1” facilities not routinely provided </li></ul>
    20. 20. Essential to Compliance <ul><li>Thorough impact & risk analysis </li></ul><ul><li>Focus on medium & high risks </li></ul><ul><li>Right supply model for worker & client </li></ul><ul><li>Avoid encouraging workers into a particular supply model </li></ul><ul><li>Robust processes for information flow </li></ul><ul><li>Fair contracts with clear liabilities in terms of each party’s responsibilities </li></ul><ul><li>Don’t assume that the responsibility lies with the TWA that pays the worker </li></ul><ul><li>Indemnities may not be that useful </li></ul>
    21. 21. What Next? <ul><li>Recruitment Firms & Clients in partnership: </li></ul><ul><ul><li>Undertake impact and risk analysis </li></ul></ul><ul><ul><li>Agree implementation strategy </li></ul></ul><ul><ul><li>Update all necessary procedures & documentation </li></ul></ul><ul><ul><li>Identify any necessary additional resource </li></ul></ul><ul><ul><li>Undertake training </li></ul></ul>