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Claims under the AWR low but expected to escalate

Claims under the AWR low but expected to escalate

This was one result from discussions by a cross section of the business community at a networking meeting organised by the Association of Recruitment Consultancies (ARC) on 28th February.

Addressing an audience representing major employers and agencies, and spokespeople from the IoD, CBI and the ARC, Craig Robb speaking for HM Courts and Tribunals Service and the Department of Business Innovation and Skills, laid out the government’s position on employment tribunal reform. Relevant to this was the impact of the Agency Workers Regulations (AWR). 

It had been a widely held belief that the unions were planning to issue multiple claims under the AWR after Christmas, but Mr. Robb said that the government was not aware that any had been made. No one present pointed to any AWR claims having yet been issued.

This disclosure followed revelations that many hirers are taking steps to limit the equal pay rights of agency workers despite reports earlier this year that some unions threatened action, claiming that use of the “Swedish Derogation” is unjustified and a “loophole” which unfairly restricts agency workers’ rights to equal pay. The representative of one major hirer said that that it had taken steps before implementation of the AWR to create new starter rates which were being applied to new employees resulting in them receiving lower pay, and that this coupled with use of the Swedish Derogation meant that, of its workforce of many thousands, only a “handful” of agency office workers were achieving any pay benefit. However that hirer is under the impression that the unions are happy with the Swedish Derogation for the time being, since they are able to recruit new members.

Despite what appears to be good news, Craig Robb commented that as the year goes by more AWR claims are anticipated by the government, with an upward curve in expectation.

It was acknowledged by all present that the administrative cost of the AWR is overly high, and the AWR act as an unnecessary deterrent to hirers, although it was felt that the majority of hirers are still not aware of the regulations. Both the ARC and the CBI have called on the government to conduct an early review, and Alexander Ehmann, speaking for the IoD, said that the AWR are still far too wide in scope. The ARC in particular pointed to the combination of administrative cost and likely claims versus benefit for agency workers in its current campaign, entitled “the AWR is doing more harm than good”, to urge the government to limit the rules wherever permitted by the Directive.

Adrian Marlowe, chairman of the ARC,said “the meeting was a good high level debate on future issues relevant to employment affecting employers and agencies. The expectation that AWR related claims will increase is inevitable and worrying, particularly at a time when the focus should be on helping businesses reduce costs and encouraging employment. The rocks are there to be seen and the government should be steering a course to lessen the chances of impact.”


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