10 months on from the introduction of the Agency Workers Regulations (AWR), we wonder how agencies are coping with the requirements of AWR and in particular whether their clients are any the wiser!
Rather eerily, things have gone a little quiet. After a frenzy of activity at the end of last year, and a trickle of queries in early 2012, I talk to my clients about what is happening on the AWR front. The response is rather unsettling. It would appear that smaller agencies fall into two camps (a) those that have understanding clients who try and complete the agency AWR information request forms and gold stars for those clients providing information at day 1, and (b) those that send through their requests for AWR information and are greeted with a wall of silence.
Many SME agencies do not have the infrastructure to support a PAYE model for contracting staff, and can only supply contracting staff via personal service companies or umbrella companies suggesting a more straightforward explanation as to why there are no AWR information flow issues or activity between the agency and the client. With many agencies and clients either determining the status of their limited company contracting staff for AWR purposes or passing this responsibility directly onto the limited company contracting staff themselves to confirm their status, it would make sense that if those limited companies are perceived to be outside of scope of AWR that no further business process is required on the part of the agency.
However, this doesn’t necessarily explain the lull with respect to those agencies who are supplying umbrella contracting staff or who operate their own PAYE model.
Clients may fall into one of the following categories:
(a) Don’t understand AWR, have signed the agency’s standard contracts and ignore the information requests issued by the agency;
(b) Aware of AWR but refuse to comply with any process and refuse to hand over information irrespective of how contracting staff are engaged;
(c) Aware of AWR and simply confirm that the pay information at day 1 is correct and that it applies for the duration of the assignment irrespective of the type of contracting staff supplied; the agency must not issue AWR information requests;
(d) Aware of AWR but require only limited company contracting staff to be supplied and will not provide information on the basis that the client assumes contracting staff are outside of AWR;
(e) Aware of AWR and will provide information for PAYE contracting staff and umbrella contracting staff but not for limited company contracting staff on the basis that all limited company contractors are outside of the scope of AWR (irrespective of whether or not the agency has made a determination or the contracting staff themselves have confirming they are outside of AWR);
Whilst I prefer not to predict which categories are the most popular, agencies and umbrella companies alike appear to be sticking to process and issuing their information request forms irrespective, possibly at the annoyance of their clients but creating an audit trail nonetheless in the event an issue arises.
Whilst it is still early days, there are a number of cases that are making their way through the tribunal system. They are a mixed bag, and few are solely claims for AWR. As was always predicted some claims are confused; particularly around the distinction between AWR rights and employment rights (employment status argument). Others have thrown AWR in along with the kitchen sink.
Some cases include factual arguments over the accuracy of comparator rates provided by clients, which are disputed by the contractor, which will create interest if they do not settle and go the distance to a hearing.
Whilst not directly involved in a case involving limited company contracting staff, I am aware of one case in existence, which is complex due to the number of parties involved.
So for now, we have to wait and see but it appears inevitable that a few cases will reach a preliminary hearing if not a full hearing before the year is out.