AWR introduction ‘will be painful for staffing companies’

AWR introduction ‘will be painful for staffing companies’

Compliance is key, according to FCSA

Industry must make the right preparations this summer to comply with AWR legislation, rather than bury their heads in the sand or create novel ways to avoid being caught, according to a communiqué dispatched to staffing companies across the UK by the Freelancer and Contractor Services Association (FCSA) this week. Chair of the Freelancer and Contractor Services Association, Stuart Davis, said:

“The staffing industry is counting down until AWR legislation comes into force in October, and like elsewhere preparations at FCSA are underway, with revisions to our Code of Conduct. Since the guidance was published, there has unsurprisingly been much debate about the impacts, risks and opportunities for all parts of our sector.  To understand AWR, you must understand the core principle behind it – ensuring temporary or agency workers have access to the same basic pay and conditions as their permanent equivalent. Highly-skilled professional contractors are not exploited or vulnerable, and have always earned more than their permanent counterparts, so compliance within this segment of the market will be less problematic.

“The AWR legislation itself says more than the guidance published last month, and it is clear that there will, in broad terms, be three options for highly-skilled freelancers and contractors. First, a compliant ‘Swedish Derogation’ approach, involving work via a company offering full employment and pay between assignments for the contractor. Second, work via a company offering a ‘match permanent pay’ model with full employment rights. Third, contractors may choose to work via their own limited company. Obviously, the ability for workers to be engaged and paid directly via a recruitment business will remain, subject to the recruitment business implementing either a compliant Swedish Derogation or match permanent pay approach.

“Proper compliance is achievable but it is going to involve difficult business decisions for some end clients, recruitment businesses and service providers alike – even FCSA members - and new commitments that some may not find palatable. But those ignoring the new legislation or seeking ‘clever’ evasion strategies are both likely to find themselves targeted strongly by the Department for Business, Innovation and Skills and trades unions, which will actively be looking to support members in bringing cases to tribunal. The key between success and failure will doubtless be to be prepared, and armed with the information needed to chart a compliant course.”