The final version of the Guidance to the Agency Workers Regulations has been published by BIS today
Simon Horsfield, partner, Pinsent Masons "The final version of the Guidance to the Agency Workers Regulations has been published by BIS today. It contains a number of changes from the draft which was circulated for comment at the beginning of last month and, overall, is to be welcomed. Employment Relations Minister, Edward Davey, is said to appreciate that the agency sector is a key part of the UK's flexible labour market and, in preparing the Guidance, BIS has displayed a good understanding of how the temporary recruitment industry works in practice and has sought to embrace the industry rather than stifle it.
The Guidance includes a very helpful section on whether independent contractors who operate through a limited company and are supplied via an agency a re in scope for the purposes of the Regulations. Unlike the earlier draft, which unhelpfully focused on whether the contractor worked under the direction and supervision of the hirer, the Guidance indicates that the real test is whether the contractor is genuinely in business on their own account ( i.e. self employed). If so, they will be out of scope and will not gain the protection of the AWRs.
Staying with the question of who is in scope, the Guidance does not, unfortunately, provide much clarification regarding managed service contracts (i.e. where a client outsources an activity to a third party provider). Accor ding to the Guidance, such contracts may be in scope if the third party provider's employees work under the supervision and direction of the client. This will be somewhat of a concern for those who have outsourced activities, where there is often a blurring of the boundaries over the extent of the client's supervision and direction. The extension of the right to equal treatment to workers in such situations may be an unwelcome consequence of the AWRs and is likely to be a source of challenge when the Regulations come into force.
One of the most surprising elements of the Guidance relates to what constitutes pay for an individual who is employed by an umbrella company. Under umbrella arrangements, the employee's place of work is often stated as being their home. This means that they can claim business travel expenses for t heir journey to their temporary place of assignment. The Guidance indicate s that any such expenses can be treated as part of the umbrella employee's pay when determining whether they are being paid the same as their comparator. This will be a significant boon to the umbrella companies and will help to ensure that they continue to survive after the Regulations come into force."