AWR: Strategy Development

Presented by Samantha HurleyAPSCo

28th September 2011

Outline

Overview of AWR & new rights Who is liable Who is inside & outside of Scope Pay between assignments model

(Swedish derogation) Impact and risk assessment

approach Key Points for strategy development

Overview of AWR

Purpose: to give the same basic working & employment conditions as if engaged directly

1st October 2011 – not retrospective Designed to protect vulnerable

workers Doesn’t confer full employment rights Provides new “Agency Worker”

employment status

Day One Rights

Equal access to:– collective facilities & amenities; and– information about relevant vacancies.

These are not enhanced access rights.

Less favourable access may be objectively justified

Equal Treatment Rights

12 week qualifying period– breaks either reset, pause, or continue QP– same role, same hirer

Same or substantively similar role Agency worker informed of new role Same hirer – dependent upon legal

entity Structure of assignments

Equal Treatment Rights

After 12 week qualifying period Basic working & employment conditions only Treat “as if” recruited directly to same role Can compare to pay scales, relevant collective

agreements, established practice Can make comparison between AW & existing

employee doing broadly similar work Unique roles AW still entitled to relevant terms, which

generally apply in the workplace

Equal Treatment Rights

Basic conditions: pay; duration of working time; night work; rest periods; rest breaks; & contractual annual leave (above statutory entitlement)

Pay includes: basic pay; overtime payments;

shift/unsocial hours allowances holiday pay bonus/commission attributable to work

done vouchers/stamps with a monetary value

Equal Treatment Rights

Pay excludes: occupational: sick pay; pensions;

maternity, paternity, or adoption pay; financial participation schemes

redundancy or notice pay (statutory or contractual)

advances in pay, or loans expenses the majority of benefits in kind bonuses not linked to work done

Pregnancy & Maternity Rights

Right to take paid time off for ante-natal appointments

Right to be offered alternative work, where assignment is terminated for H&S reasons

Right to be paid for the intended duration, or likely duration of the assignment

Liabilities & Remedies

Who is liable in the event of a claim: Client liable for Day 1 entitlements All parties potentially liable to the extent they’re

responsible Compensation award: minimum of two weeks

pay, no maximum Award can be reduced to what is just and

equitable Additional awards of up to £5,000 where

assignment(s) structured to avoid qualifying period

Failure to respond to information requests – tribunal could draw adverse inference

Who is Within Scope

Temporary Work Agency definition is wide: includes recruitment firms, umbrellas & other intermediaries supplying staff temporarily under the supervision & direction of [clients]

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

Umbrella Workers

Umbrella workers could be outside of scope if no client supervision & direction

Otherwise umbrella workers will be within scope.

Low risk supplies:– AW earns equal/more than comparable perm– No significant bonuses within scope– Client holiday entitlement close to statutory

May be offered a PBA model to take worker outside of scope – it doesn’t

Pay Between Assignments Model

(Swedish Derogation) Only likely to be useful where substantial pay differential

Exemption from equalisation of “Pay” only All other equal treatment & day 1 rights remain Regulations ambiguous - compliant model

unclear - often low cost = high risk If found not to be compliant, the AW will have

right to equal Pay TWA/client could be liable if enforced the model

and/or refused any funding Risk likely to increase in unionised environment

Who is Out of Scope

BIS guidance suggests the following will not be agency workers: – genuinely self-employed – no client

supervision, no personal service, & TWA/client are client/customer

– Managed Service Contracts – supplying service rather than staff, supervised by TWA

– working for in-house temporary staffing banks

Managed Service Contracts

Service provider must genuinely supervise and direct its workers

If client determines the manner in which services delivered then probably in scope

On-site presence alone unlikely to be sufficient

If service provider engages workers through another TWA, then in scope.

Terms that apply dependent upon where supervision lies.

Limited Company Contractors

BIS: simply putting earnings through a limited company won’t put individuals beyond possible scope

They are likely to remain in scope where:– client is not a client/customer– client has supervision & direction of AW

A tribunal will look at the reality of the situation LC Contractors outside IR35 unlikely to claim Encouraging individuals into inappropriate

supply models or making it the only option is risky

Also increased risk under Managed Service Company tax debt transfer legislation

Determining Supply Model

Look at worker’s history:– Length & consistency of professional

contracting career, and tax status

Does the role lend itself to Ltd Co. model? Review procedures: supervision of

contractors Does client contract include flexibility to

allow self-employed contractors? Would a deliverables based contract

(rather than T&M) be appropriate?

Impact & Risk Assessment Partnership Approach

Impact AssessmentInformation Gathering Process – understand scale & structure of usage;

identify high risk usage, & other risk factors; assess supply models

Risk AnalysisDetermine risk level & cost of supply models: probability v.

severity; identify medium & high risks; identify cost & risk of possible alternative

Implementation StrategyNew supply models; revised internal procedures; communication;

review of contractual documentation; training

Impact AssessmentInformation to Identify

current supply model: LC contractor, Umbrella, PAYE

typical assignment length and pattern length & pattern of breaks between assignments “as if” terms, or identifiable comparable employee established/formal pay scale/collective

agreements basic terms & conditions at the workplace bonuses/commissions – are they within scope of

“pay”, already reflected in worker’s pay rate? annual leave entitlements union presence performance appraisal systems to calculate

pay/bonuses “day 1” facilities not routinely provided

Essential to Compliance Thorough impact & risk analysis Focus on medium & high risks Right supply model for worker & client Avoid encouraging workers into a

particular supply model Robust processes for information flow Fair contracts with clear liabilities in

terms of each party’s responsibilities Don’t assume that the responsibility lies

with the TWA that pays the worker Indemnities may not be that useful

What Next?

Recruitment Firms & Clients in partnership:– Undertake impact and risk analysis– Agree implementation strategy– Update all necessary procedures &

documentation– Identify any necessary additional

resource– Undertake training