ARC challenges AWR

ARC challenges Government Agency Workers Regulations Part of the draft regulations to bring the Agency Workers Directive into UK law may not be legal, according to inquiries carried out by the Association of Recruitment Consultancies (ARC). The government laid draft Regulations before Parliament in January 2010, following a two part consultation which ended in December 2009. However it would appear that the draft regulations contain important new aspects that were neither raised in the consultation process nor more importantly should be introduced via secondary legislation. The Regulations provide that recruitment businesses which have no contract at all with an agency worker, can be made liable for the rights that the agency worker will now acquire, even though such recruitment businesses are excluded from the scope of the Directive. According to legal advice including that of Queen’s Counsel’s obtained by the ARC, this is not lawful. ARC Chairman Adrian Marlowe explains…

ASDA deal not model solution

Commenting on recent reports about the deal struck between supermarket chain ASDA and the trade union Unite in advance of the Agency Workers Regulations that are due to come into force next year, the Association of Recruitment Consultancies (ARC) urges caution against adopting the model ahead of Regulation. ASDA has won kudos for its agreement to liaise with its suppliers, unions and temporary worker agencies to ensure the workers are paid the same as permanent staff and its competitors, and other businesses will now be under pressure to follow in its footsteps. However The British Chamber of Commerce has estimated the cost of the Agency Workers Directive to be £1.5 billion per year. By the Government’s own estimates, there are 1.3 million agency workers in Britain, about 5 per cent of the working population. That figure is likely to rise as companies start to come out of recession but do…

Modis Research on recruiter value for money

Almost three quarters (72%) of employers say that recruiters do not offer value for money, according to research from IT and engineering recruiter Modis. Jim Albert, managing director, at Modis International recently said: “These figures show the reputational issue recruiters have faced in the past remain as persistent as ever. There has been a movement within the industry in recent months aimed at achieving a more serious shift in how we’re seen by the wider business community. That movement is failing to have a significant impact so far.” “For the situation to change to any great degree, recruiters need to put action behind their words, invest more heavily in understanding clients and candidates, hire and train the brightest consultants possible and use their skills and expertise to deliver truly consultancy advice.” Adrian Marlowe, Chairman of the Association of Recruitment Consultancies (ARC), commented “The results of  Modis’s research that 72% of…

Employment status case law update

In two recent decisions, agency workers supplied by employment businesses have been prevented from claiming employment rights against the end hirer. These decisions should serve as a welcome boost to the industry as clients concerned about employment status will feel that little bit more secure about engaging workers through third party staffing companies. Alstom Transport v Tilson The first case, Alstom Transport v Tilson was an appeal by the hirer against an Employment Tribunal decision that was reported by Lawspeed in August 2009. In the original case, a limited company contractor was awarded employee status and was therefore entitled to succeed in a claim for unfair dismissal. This seemed an unlikely result – Mr Tilson himself had asserted that he was not an employee and had twice refused to become one. Furthermore there was both an employment business and a personal service company in the contractual chain between the hirer and…

Social Media Networking to become a major recruitment tool

Social networking may partially replace traditional recruitment methods in the near future and could therefore reduce agency income. This is the view of Stephanie Lee, Sourcing Specialist for European Staffing for Intel Corp UK. Intel is the world’s largest semiconductor chip maker, and invented the X86 series of microprocessors that are found in most personal computers. At a packed meeting of recruitment agencies and hirers of agency workers, recently held by the Association of Recruitment Consultancies*, Lee explained that Intel had a reputation for only employing ‘geeks’ and in order to rectify this image, had developed a ‘social media vision’. She estimated that Intel was now the sixth biggest user of social media in the world. Special social networking groups had been set up to reach out to potential employees and to explain more about the company as an employer. Thus those looking for career opportunities had been targeted and a…

Umbrella Company Problems

JSA enters voluntary arrangement owing £11.3 million The well known umbrella company JSA Services Limited entered into voluntary arrangements with creditors in December 2009. Among its total debts of £11.3million was £10.6million owed to HMRC, including for PAYE and National Insurance contributions. Debts of this size usually only arise if there are fundamental flaws in computation and status, and could relate to incorrect payment of expenses. For many years, JSA Services, which is part of the JSA Group, has been marketed as a compliant umbrella solution. The JSA website continues to describe JSA’s umbrella service as “tax-compliant”, including accreditation stamps of approval from a number of well-known parties: APSCO, the PCG, Professional Passport and Shout 99. JSA is also understood to be a founder member of the Service Providers Association, founded last year to act as a trade body for compliant umbrella service providers. This must raise some serious questions…

Limited companies within AWD Regulations

The much anticipated Agency Workers Regulations 2010 were laid before parliament in January. The regulations are intended to give agency workers equal entitlement to pay and leave arrangements as if they had been recruited directly by their hirer, following an EU Directive finalised in December 2008. The Regulations are due to be adapted into law by March 2010 with application from October 2011. The good news is that the proposal to introduce a reasonableness test for charging of transfer fees has been dropped. Adrian Marlowe, MD of Lawspeed and chairman of the Association of Recruitment Consultancies (ARC), said “We saw this recruiter specific proposal as highly dangerous for the temp contracting industry, leading to a potential blood bath as hirers switch workers from one agency to another, and we mounted a detailed and well publicised campaign to stop it. I am therefore very pleased to see that the Government statement…

Agency Workers Regulations 2010 laid before parliament

The much anticipated Agency Workers Regulations 2010 were laid before parliament in January. The regulations are intended to give agency workers equal entitlement to pay and leave arrangements as if they had been recruited directly by their hirer, following an EU Directive finalised in December 2008. The Regulations are due to be adapted into law by March 2010 with application from October 2011. The good news is that the proposal to introduce a reasonableness test for charging of transfer fees has been dropped. Adrian Marlowe, MD of Lawspeed and chairman of the Association of Recruitment Consultancies (ARC), said “We saw this recruiter specific proposal as highly dangerous for the temp contracting industry, leading to a potential blood bath as hirers switch workers from one agency to another, and we mounted a detailed and well publicised campaign to stop it. I am therefore very pleased to see that the Government statement indicates…

ARC reports on the Agency Workers Directive Part 2

The 2nd Consultation on the Agency Workers Directive brings some key issues sharply into focus, says the Association of Recruitment Consultancies. Whilst the overall objective of the Directive itself is to promote flexibility within the workforce, and the Directive recognises the difference between employment and agency work, the translation of the Directive into UK Regulations as currently suggested seems to counter that objective. ARC has highlighted many examples in its response to Government. Adrian Marlowe, Chair of ARC explained “The principle that agency workers are to receive in terms of pay and working time arrangements many of the benefits that employees only achieve because of the long term nature of employment goes against common sense. If this is not recognised as it should be, where an employee earns less than an agency worker, how long will it be before employees demand the same rates? The problem largely is the test…

Company opt outs to be retained – 12/11/09

Good News The government has published the response to its consultation earlier this year and the good news is that the Limited Company opt-out has not been touched, neither for limited company contractors nor for umbrellas. A change had been widely feared, and so this news is very welcome. Changes are proposed to modelling recruitment companies and for those companies operating online. Employment Agencies and Employment Businesses will no longer have to state what type of recruitment company they are in advertisements, but instead state whether the vacancy being offered is ‘temporary’ or ‘permanent’. Also, Employment Agencies will no longer have to carry out suitability checks for permanent candidates unless it is for a position where there will be contact with children or vulnerable adults nor will they have to agree terms with candidates or hirers before an introduction- although it will make commercial sense to continue to do so.…