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.

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…

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…

Swine flu and sickness absence

The Swine flu pandemic is currently major headline news and having an increasing impact upon the population, there has been a natural increase in the levels of sickness absence and concern. However, the pandemic is leaving both employers and recruiters with a number of questions, for example are you obliged to pay a worker during their absence, are there are special precautions that you need to take, what about people who are off because their children are ill, should staff be allowed to work from home and can you ask someone who you believe may have symptoms to remain away from work? Legally, swine flu is no different from ordinary flu or any other illness, for most healthy people who do not fall within a high risk category, the government’s advice is that the symptoms should be mild and the illness relatively short term. Therefore whilst a sensible approach should…

AWD threatens temp to perm fees

After a huge battle with recruiters in the middle of this decade the government finally settled on a formula for limiting temp to perm, temp to temp and temp to third party fees (“transfer fees”). You will all no doubt be aware that the rules are set out in Regulation 10 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003. However the battle has begun once again. It is a little reported fact that the government has included a section within the AWD consultation indicating its intention to reopen the debate about transfer fees. It blames the requirement for this on the Agency Worker’s Directive, although we would disagree that the Directive contains any requirement for further measures. Unlike the restriction contained in Regulation 10, which disallows charges if the transfer takes place after certain periods of time (e.g. 8 weeks after end of Assignment) the new proposal…

Government massively gold plating AWD says IoD

The Financial Times has today reported on concerns by the Institute of Directors (IoD) that the government is proposing to gold plate the Agency Workers Directive. See article Business warns on agency workers directive. This follows work undertaken by Lawspeed, with the Association of Recruitment Consultancies and the IoD. The orginal article submitted by the IoD to the FT and posted on the IoD website was as set out below. Much of the information relied upon by the IoD has been obtained or instigated by ARC towards the IoD and ARC’s joint aim of protecting hirers, agencies and workers alike from a damaging implementation of the Directive. ARC’s work in this area in conjunction with various stakeholders including the IoD and Federation of Small Businesses is continuing. The IoD article is as follows: Government massively gold-plating Agency Workers Directive, says IoD and ARC Research we have undertaken in conjunction with the recruiter trade…

ARC exposes Agency Worker Directive

Government plans to implement the Agency Workers Directive go far beyond the intention of the EU Parliament, warned ARC (Association of Recruitment Consultancies) today (25 June). At a seminar held by the association Adrian Marlowe, Chair of ARC said: “In common with most others, we had thought that the Directive requires the government to implement the legislation in the way proposed. However, closer inspection shows the government has disregarded the definitions and principles in the Directive that limit the scope of equal treatment. “The impression that the government is only acting in accordance with the Directive is a myth. The Directive does not apply to agency workers on assignment with the vast majority of average hirers, yet the government would have us believe that it does, in order to justify a more burdensome UK implementation that will apply to all assignments. Everyone seems to have fallen for this hook, line…