ARC asks: “Is the public sector closing the door on AWR solutions?”

As private sector businesses explore solutions to the AWR is the public sector doing the same? No, not if the Department for Education position is an indicator, says Adrian Marlowe, chairman of the Association of Recruitment Consultancies (“ARC”).

Now that the Agency Workers Regulations are in force, understandably both agencies’ and hirers’ minds are focused on the problems that could arise and how best to avoid them. With reports in the press that Morrisons is exploring a Swedish Derogation model, under which agency workers are not entitled to any equal pay, and that Premier Foods is planning a cut in the rates for its starter employees so that the comparator for agency worker pay is less, it is clear that private sector companies are protecting their cost base by looking at what the AWR permits. This is hardly surprising. The advice is available to follow and these solutions are entirely legitimate. 

Another ‘solution’ permitted by the AWR is that an individual is not an agency worker if the hirer is the client of a profession being carried on by an individual, provided there is a contract to this effect – see Regulation 3(2)(b) of the AWR. If the individual has no agency worker status he/she has no entitlement to the AWR rights and therefore no entitlement to equal pay. A useful tool one would think, agreed by the unions amongst other things (as the regulations were all agreed with the unions before introduction), and one that I believe a number of hirers are also considering.

So is the public sector approaching the issues in the same way as the private sector?

We may look to education for a possible answer to this question. Guided by the Department for Education (“DfE”), LEAs and state schools are major users of supply teachers, paid for by the taxpayer. Supply teachers are a key resource. However, according to recent press releases from Ranstad and the REC, the DfE, in conjunction with the REC, appears to have concluded that teachers are not exempt from being agency workers under R.3(2). The REC apparently has included a prohibition against using the exemption for teachers in its DfE approved Quality Mark (QM) for teaching agencies, thus effectively banning the use of that exemption and ensuring that all supply teachers receive the AWR rights and in some cases higher pay. Most teacher supply agencies are subject to the QM. 

It is a requirement of R.3(2) for the exemption to apply that the hirer must have the status of a client or customer of the professional. The basis for the decision is understood to be that a teacher cannot have the LEA or school as his or her client. 

On a simple analysis this would not seem to stand up. Firstly it seems that no one is suggesting that teachers generally speaking are not carrying on a profession. The point of contention is whether a school is the client of the person carrying on the profession. The Concise Oxford Dictionary, amongst others, defines “client” as being “a person using the services of a professional person or organisation”. The school does use the services of a supply teacher on the face of it, so if the agency contracts provide that the school/LEA is the client of the teacher the requirements for R.3(2) should be complied with.

So why has the DfE decided to preclude exemptions from the AWR? Does this indicate a policy decision across the public sector to refuse exemptions under R.3(2), even if otherwise legitimate? Does this in turn mean that the public sector is to be precluded from undertaking the same cost saving exercise that the private sector has been exploring? Also, why has the REC so readily agreed to amend the QM, and where has the driver for this come from?

The DfE’s decision offends a number of basic principles, not the least that many would say the public sector should be looking at every possible and legitimate way to save costs in these difficult times. At the same time when again there is a  focus on improving teaching standards, the decision ironically may stop senior teachers from taking up more junior roles because of the rigid payment scale in force in the education sector, that is unless the schools are willing to swallow higher pay rates. Is this a good move?

Until the position is clear surely the DfE should not seek to force its own interpretation on others who do not necessarily agree with it for perfectly valid reasons without at least having a transparent debate with the industry first.  Of course in the absence of agreement the matter could ultimately be resolved by the Courts (which may happen in any event).

Unless autocracy is allowed to rule supreme the recruitment sector should challenge decisions that are wrong, unfair or do not follow due process, rather than simply concede. We would certainly not like to see this executive decision as any kind of precedent, which would not be in the interests of our members or, we believe, the wider audience. The ARC therefore made enquiries last week of both the DfE and the REC to establish the background for the inclusion of the new QM standard. Hopefully this will lead to the open discussion that to date has been missing.

Adrian Marlowe