Seminar – Agency Workers Directive Second Consultation – countdown to what?

With the Conservatives warning against possible cost to the economy rising to some £40bn over a 10 year period and widespread concern of government overkill (“gold plating”), the Agency Workers Directive has already proved to be the most controversial piece of proposed legislation affecting the recruitment supply industry thus far. Now that the  government’s actual plans have been published, how will the new laws affect you?  More importantly what do your clients think? Are limited company contractors inside or outside the scope? Is employment of your workers the answer, or is the supply agency model facing a radical setback? Various areas of the government’s plans remain controversial, require clarification, and a response from the industry is sought. Addressing the issues, speakers include: Adrian Marlowe, our MD and Chair of ARC (the Association of Recruitment Consultancies) Karen Wilshaw  –  Assistant Director for Atypical Work, Employment Relations Directorate, Department for Business Innovation and Skills (BIS, formerly…

Need for a forensic approach to the AWD

What the above two articles demonstrate is how easy it is for facts to be misreported and also how important it is that trade representation is accurate and protective of members interests. The press is always keen to whip up a story but it is incumbent upon those acting for the industry to take a calm and measured approach and provide the correct accurate advice and representation. Confusion must be avoided. Lawspeed has a huge background in the recruitment industry and a reputation for sound advice based on a real legal and commercial understanding as well as a successful track record in representing to government. ARC’s approach to the AWD draws on this. ARC does not welcome yesterday’s announcement. The opposite is the case.  Bringing forwards legislation early cannot benefit the industry in any respect. As we have said above, if you agree with ARC’s approach please join ARC to…

HR set to hire direct

In an article published in Personnel Today on 4th September the HR Manager of a large hirer of agency workers indicated that once the Directive is in place they intend to hire temps direct from their own internal bank of temp workers. They made it clear that this was not an off the cuff observation but a carefully thought out strategy. We have regularly warned about the potentially damaging impact of the Directive. As yet none of us know the details of how the government intends to implement the new law, but here is the clearest signal yet that supply agencies could face a serious cut in business. To alleviate the risk of the above occurring ARC, the Association of Recruitment Consultancies, has put forward a number of proposals. The key ones being that the government should only implement the Directive strictly and not gold plate, that workers earning more than…

Brown bows to union pressure at the TUC conference

Some of you may have read an article from Recruiter.co.uk sent under its email alert scheme headed “Agency workers directive implementation delayed until 2010”, which stated that Gordon Brown has announced that the Directive will be included in the “next parliamentary session”, and therefore cannot be implemented until April 2010. Kevin Greene of the REC is quoted as welcoming this development. He says it shows that government is listening to the voice of the recruitment industry. The implication is that there is to be a delay. However what Gordon Brown actually said was “when parliament returns our new legislative programme will include equal treatment for agency workers and that in the coming few months the law will be on the statute book”. The Recruiter article is therefore wide of the mark. Rather than indicating a delay it is clear that the government intends to steam ahead with the new legislation…

Holiday pay decision

The position regarding holiday pay for those on long term sick leave has recently been clarified by the European courts. The UK courts had suggested that workers on long terms sick leave should not accrue holiday entitlement, on the basis that they are already on leave. However this has been overruled by the European Court of Justice (“ECJ”), who has confirmed that a worker on sick leave will still accrue holiday. This includes where a worker has been off for an entire year, in which case 28 days of their leave will be considered to be holiday and they will be entitled to holiday pay. The decision is perhaps not surprising as this is also the position with a woman on maternity leave, as she will also continue to accrue holiday during this time. In addition to the decision regarding sick pay, the ECJ also confirmed that a claim for…

Employment status

The case of a limited company contractor who has been able to successfully assert that he was an employee of his client has recently been raising eyebrows across the industry. In Asltrom v Tilson, Mr Tilson, who operated through his own limited company which was acting as a subcontractor, whose principal was being supplied to the client through an agency, successfully showed that he was an employee of the client and thus succeeded in his claim for unfair dismissal.  Although the contractual documentation appeared to suggest that the relationship was one of an independent contractor, this documentation was regarded as “bogus” by the court. On examining what was actually happening on a day to day basis, the Court found that the evidence supporting the case that Mr Tilson was an employee of the client was compelling. Such factors included that Mr Tilson was able to hire, discipline and dismiss the…

Planned increased in the national minimum wage

From 1st October 2009, the national minimum wage will increase from £5.73 to £5.80 per hour.  A recruiter or umbrella company whose rates fall below such levels will be advised to address these matters with clients, unless there is already clear provision within contracts for an increase in rates to account for such costs. Payment of the correct level of the national minimum wage is also significant following the increases in enforcement powers and penalties for non payments, earlier this year. October will also see an increase in the maximum cap on a week’s earnings for the purpose of calculating statutory redundancy payments. A week’s wages had previously been capped at £350 per week. However, as announced in the last budget for redundancies which take effect after 1st October 2009 the maximum weeks wage shall increase to £380 per week.

Fines imposed for Anti-Competitive activities

As has been seen in the recent case involving the massive fines imposed on a consortium of recruitment businesses called ” the Construction Industry Forum”, the penalties for engaging in anti competitive behaviour can be severe . Apart from fines, they can extend in certain circumstances to the disqualification of directors. So what effect could this have on your business? Most of you may not even consider the implications of competition law in your daily business.  However UK competition law is drafted widely, with any agreement between businesses that may have an effect on trade or that may prevent, restrict or distort competition within the UK being prohibited.  Whilst clearly, the establishment of a “cartel like” forum specific to a certain industry or sector as in this case may well ring “anti competitive” bells, less obvious arrangements could also attract attention from the authorities. Consortiums, joint ventures If you are part of a consortium or are considering…

Construction industry

HMRC has last week announced a consultation on the self employed status of construction workers. It is common within the construction industry for workers to operate via the CIS scheme, which allows for  self employed workers to have  certain level of tax deducted at source, which depending upon their registration status with HMRC can be 30%, 20% or nothing.  The government consultation is looking at the self employed status of such workers, with a particular focus on whether they provide their own plant, materials and equipment. At present this is limited to the construction industry. However, if changes are made so that workers in one industry were to be deemed not to be self employed due to the fact that they do not provide all tools and equipment, this could potentially have consequences across other industries also. In addition to this consultation, there are increasing calls, including a private members…

ARC membership quadruples with legislation message

After weeks of hard work with the Institute of Directors (IOD) the message that we have been attempting to publish that the government intends to massively gold plate the Agency Workers Directive has finally hit the national press. In an article on 23rd July the FT reported on concerns that the government intends to go way beyond the intention of the EU Parliament when implementing the Directive in the UK. ARC has been in discussion with numerous stakeholders on this issue, which neither the government nor some recruiter representatives seemed keen to reveal. Adrian Marlowe read out the key text of the Directive at a BIS consultation meeting earlier last month and asked the government spokesperson to explain why the industry was not being consulted on this crucial issue. In addition ARC has been pressing the REC to object to the gold plating in its response within the consultation. Apparently…