APSCo urges Recruitment Firms to be vigilant regarding AWR indemnity clauses

APSCo urges Recruitment Firms to be vigilant regarding AWR indemnity clauses

Follows the publication of the BIS Guidance

The Association of Professional Staffing Companies (APSCo) is advising its members to be cautious on the issue of indemnities in client-led contracts, following the publication by BIS of the Agency Workers Regulations Guidance on 6th May. 

Ann Swain, Chief Executive of APSCo, commented “we believe that The Department of Business Innovation and Skills (BIS) has done a comprehensive job in holding open and transparent consultations with all major stakeholders regarding the AWR, and they have gone to great lengths to listen to the concerns of the industry.  The newly published guidance goes a long way to assist recruitment firms in clarifying their obligations, and will lessen the burden of navigating their way to compliance.”

Ann Swain clarified “I say “burden” because there is no question that the AWR will affect the business of recruitment companies whose temporary workers are paid less than the comparable end-user organisation’s permanent staff, because the raison d’etre of the legislation is to provide equal treatment.  However, at the professional end of the market, where temporary workers pay is generally equal to or more than the comparable permanent staff the weight of compliance is more likely to be administrative.”

APSCo was the first to recommend the inclusion of a list of attributes within the guidance to assist recruitment firms in determining an individual’s employment status.  Ann Swain commented “We lobbied hard on this point, and are extremely pleased that our recommendation has been acknowledged by the inclusion of a link to a website which provides this information.”

For years now APSCo has worked closely with the European Parliament and more latterly the UK Government and BIS regarding the AWR, “we have worked hard to develop a relationship with BIS” says Ann Swain.  A spokesperson from the Department for Business Innovation and Skills commented “APSCo has been a very useful partner throughout the consultation period.  In particular APSCo’s recent members’ meeting provided us with a perfect opportunity to understand what the recruitment industry wanted from these guidance notes.”

However, it seems APSCo would have preferred to see more included in the Guidance. 

Ann Swain commented: “Would we have liked to see the guidance go further?  Yes, we would.  There are areas where we feel more clarity would have been useful.  We are particularly concerned about the already growing issue of clients including indemnities within their contracts, which pass liability for any breach under the AWR to the recruitment firm.  This is a disturbing trend, and is clearly not within the spirit of the legislation.  The Guidance is explicit that liability will be apportioned dependent upon a party’s level of responsibility for a breach, but we would rather it went one step further, and give a clear message to end-user organisations that indemnity clauses, which seek to circumvent their liabilities under the AWR would not be considered appropriate.”

APSCo is particularly concerned because such liability may be uninsurable, and agreement to these clauses could make selling a recruitment firm extremely difficult, and have a substantially detrimental affect on its worth.  APSCo is acutely aware of the lack of bargaining power recruitment firms often have in negotiations with end-user clients, however, they are urging their members to be extremely cautious when signing new client terms, and to push back on such indemnities.

The spokesperson from BIS commented that “We have done our best to take on board the views of all industry constituents and our on-going discussions with APSCo and others throughout this process has been a very important part of that process.”

Ann Swain summarised: “We appreciate that producing this guidance was always going to be a task of immense proportion, and we believe that BIS has produced a coherent interpretation that will be of use to recruitment firms and end-user organisations.  We are confident that our open dialogue with BIS will ensure the continued input of the recruitment profession into the future development of the guidance.”