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AWR Advent Calendar

AWR Advent Calendar

Lawspeed, ARC’s legal partner, has published 24 AWR myths – 1 for each advent calendar day!

1. Personal Service Company (PSC) contractors are automatically outside of the scope of the AWR

Fact or fiction?

Fiction – an individual working through a PSC is not automatically outside the scope of the AWR. However, if the individual is & lsquo;carrying on a business undertaking’ and is supplied under the right form of contract where the Hirer is the client of the company, then that individual will not be an agency worker.

2. A worker employed under a R.10 (& lsquo;Swedish Derogation’) contract will not be an agency worker

Fact or fiction?

Fiction – an individual engaged under a & lsquo;Swedish Derogation’ contract will always be an agency worker. This form of contract only removes the R.5 right to parity of pay. The agency worker will still be entitled to the remaining rights afforded by the AWR.

3. Where the individual supplied is an employee, the individual will not be an agency worker

Fact or fiction?

Fiction – regardless of employment terms, an employee will be an agency worker if supplied to work temporarily for and under the supervision and direction of a hirer. This applies whether the individual is an employee of the agency, umbrella company or other company.

4. If there is no direct recruit at the hirer’s site doing the same or broadly similar work as the agency worker, you do not have to apply the AWR

Fact or fiction?

Fiction – even if there is no one else doing the same or similar job, there may still be terms and conditions that would apply if the worker were engaged directly by the hirer. These may be laid out in a published pay scale, trade union agreement or may be usual practice within the organisation.

5. Termination of assignments before 13 weeks is illegal

Fact or fiction?

Fiction – a possible, legitimate solution is to engage agency workers on short term contracts so they never reach the 12 week qualifying period with a hirer.

6. The R.5 rights to equal pay can be avoided by switching the workers to a new hirer every 12 weeks

Fact or fiction?

Part fact, part fiction – this is correct, unless the agency worker is alternated between hirer A and hirer B in order to try and avoid the rights accruing, in which event there could be a breach of the anti-avoidance provisions in the AWR. Breach of the anti-avoidance provisions could result in a significant penalty for each individual breach.

7. If the agency worker’s rate is higher than a comparator’s, the AWR does not apply

Fact or fiction?

Fiction – where there is an agency worker the AWR will apply. If an agency worker is earning a higher rate than a comparator, they will still be entitled to all the other benefits afforded by the regulations. But make sure that comparable rates are assessed on a like for like basis taking into account paid hours and breaks.

8. If the agency worker’s rate is higher than a comparator’s, the agency worker’s rate should be reduced to equal the comparator’s after the 12 weeks. Alternatively, the direct recruit’s rate should be increased to match the rate of the agency worker

Fact or fiction?

Fiction – there are no circumstances in which the AWR requires the hirer to change payments to its directly recruited members of staff, nor need the agency worker’s rate be reduced – the rights under the AWR provide only the minimum entitlement. However you may choose to reduce the agency worker’s pay to afford the additional rights such as extra holiday, if the worker will agree!

9. An agency worker can have only one qualifying period running at a time

Fact or fiction?

Fiction – an agency worker can have a number of qualifying periods running with a number of hirers at the same time. If the agency worker completes an assignment for hirer A on Tuesday and hirer B on Thursday every week for twelve weeks, the qualifying period will be reached with both hirers in the same week. If the agency worker alternates between hirer A and hirer B each week, the qualifying period will be broken and will begin again with each assignment.

10. The AWR does not apply if the contract started before 1st October 2011

Fact or fiction?

Fiction – the AWR applies to all supply after 1st October 2011. It does not matter when the supply began. The weeks worked by an agency worker before this time however, do not contribute to the twelve weeks required to qualify for the R.5 right to equal pay.

11. The AWR only applies to those who were already agency workers on 1st October 2011

Fact or fiction?

Fiction – if the agency worker is supplied to a hirer on or after 1st October, the AWR will apply.

12. Holiday pay must be part of the & lsquo;payments between assignments’ under the Swedish Derogation model

Fact or fiction?

Fiction – holiday pay only accrues when the worker is actually working. When making payments to individuals under the Swedish Derogation model, holiday pay will not be accrued.

13. Agency workers will be entitled to SSP and payments in respect of maternity, paternity and adoption leave after the qualifying period

Fact or fiction?

Fiction – agency workers are already entitled to SSP and other statutory payments, but if the hirer has a policy to provide directly engaged staff with additional sick pay, maternity, paternity or adoption pay above the statutory minimum, the agency workers are not entitled to these payments.

14. Hirers can & lsquo;opt out’ of the regs by asking agencies to employ agency workers directly, meaning they will not be agency workers under the AWR

Fact or fiction?

Fiction – hirers, temporary work agencies and agency workers are unable to & lsquo;opt out’ of the regulations. The fact that an individual is employed by an agency, rather than hired on a contract for services, will not prevent them from being an agency worker under the AWR.

15. Swedish Derogation – if the employment contract specifies work for 1 hour a week, only 1 hour need be paid in between assignments

Fact or fiction?

Fiction – Payment in between assignments is related to amount, not hours specified in the contract. The minimum amount must not be less than 50% of the maximum amount paid for a pay period in the 12 preceding weeks. This amount cannot be less than the national minimum wage.

16. The AWR prevents agencies from being able to claim transfer fees

Fact or fiction?

Fiction – The AWR has no bearing on the transfer fees in place with you and your clients.

17. For the professions or business undertaking solution to work, there has to be an absence of supervision and direction

Fact or fiction?

Fiction – Without any supervision and direction, the individual would not be an agency worker in the first place, and the AWR would not apply. If an agency worker is carrying on a profession or business undertaking and the contracts are appropriately worded to reflect a client or customer relationship with the hirer, the individual can be taken out of scope of the AWR.

18. A worker cannot opt out of the Conduct Regulations if they are an agency worker under the AWR

Fact or fiction?

Fiction – the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and the AWR are two entirely separate pieces of legislation. There are no links between opting out of the Conduct Regulations and the applicability of the AWR.

19. Agency workers are entitled to attend the Hirer’s Christmas party

Fact or fiction?

Fiction – the right to attend a client’s Christmas party is not a subject covered by the AWR. There is nothing to stop a client from allowing all staff, agency workers or otherwise from attending these events, but the AWR does not provide individuals with additional entitlements in this area.

20. Agency workers are entitled to a Christmas bonus

Fact or fiction?

This depends – individuals are only entitled to bonuses provided by the hirer to their directly recruited staff which reward the quality or quantity of their work. An agency worker will not be entitled to bonuses which have no bearing on performance.

21. If an agency gives an indemnity to its Hirer, the Hirer cannot be taken to the Employment Tribunal

Fact or fiction?

Fiction – an indemnity is essentially an agreement that you will cover all costs and expenditures arising from a particular claim. If you provide an indemnity to your client, they could still be involved in the proceedings in the Employment Tribunal, but you will cover the costs of the case and the awards to the individual bringing the claim, if any.

22. It is the party responsible for paying the individual that will be liable for any claims under the AWR

Fact or fiction?

Fiction – liability under the AWR should be apportioned in accordance with who is to blame – this may not necessarily be the party that is actually paying the individual. Each party in the chain has responsibilities under the AWR:

The hirer is responsible for providing day 1 rights to the individual and for providing the temporary work agency with information it needs to apply other rights under the AWR

Agencies are responsible for applying the R.5 rights under the AWR if they are directly payrolling the individual, or for passing the information from the client to other third parties who are paying the individual

The company payrolling the individual is responsible for actually applying the R.5 rights and providing these to the individual.

23. Failure to give an agency worker a parking space in a staff car park would automatically breach the right to day 1 access under the AWR

Fact or fiction?

Fiction – there may be an objective justification such as a waiting list or no spaces available the AWR do not provide agency workers with preferential treatment.

24. The AWR is just an exciting Christmas present...

Fact or fiction?

This largely depends on how optimistic you are! There are certainly ways to turn the AWR and your compliance with it to your advantage, to gain more trust from your clients and more loyalty from your workers. It may change the way you work, but it needn’t be the end of your business.

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