How prepared are you for the Agency Workers Regulations?

If you are a temp recruitment company then you will be very aware of the new Agency Workers Regulations, in fact it will be implemented in just 2 months on the 1st of October. So by now you should have procedures in place to ensure you are compliant, and if not then you need to read on.

We are now beginning to see panic gripping some recruitment companies, with the amount of enquiries for our recruitment software as they realise theirs is not able to deal with the changes or that using a card or Excel spread sheet for running their temps will make their business uneconomic. The problem is that it will become very time consuming to keep on top of where your temps have been working, how many days they have been on a contract, which terms and conditions they have before and after the 12 week rule, which in itself is complicated, otherwise you will not be operating to the AWR . This will of course cut into your margins and to be honest almost impossible to manage and it isn’t helped by the clients continually eroding it at the other end.

Given the interest in the AWR I spoke to a friend of mine and an expert in the field Fiona McKay and asked if she would write an article to help explain some of the issues involved, I am pleased to say she produced a detailed handout which you can download in a pdf file from Here or you can pop along to here one of Fiona’s seminars on Friday 29th July 2011 at 09.30 until 12 noon at The Red Rooms, 111 Piccadilly, Manchester, M1 3FY other wise you can continue reading below:

The Agency Workers Regulations – what is really required of recruiters?

You have probably been to many AWR (The Agency Workers Regulations 2010) seminars offering hot solutions and the latest tips and tricks to keep you ahead of the inevitable and significant changes to the temp recruitment working model that the AWR will inevitably bring.

Fiona McKay – Managing Director of Seminars & Solutions (a specialist Employment Law Training Consultancy) addresses some of the key questions and issues that recruiters should really be asking of themselves, their clients and their intermediaries.  Fiona has spent the last eighteen months working with leading recruiters preparing them for AWR and significantly with some of the UK’s largest headcount employers putting their PSL recruitment suppliers through AWR boot camp – making recommendations to hirers of the best and the least AWR prepared recruiters in the market.


The AWR will come into force on 1 October 2011 and will give an agency worker the right to the same ‘basic working and employment conditions’ (pay, the duration of working time, night work, rest periods, rest breaks and annual leave) as a comparable direct recruit of the end user of the agency worker’s services after 12 weeks on an assignment.  The staffing company that supplies the services of the agency worker will be responsible for providing the same basic working and employment conditions and will have the bulk of the compliance burden under the AWR.  However, the AWR will also have implications for the business of the end user of the agency worker’s services, including obligations to provide access to collective facilities and amenities, and information on job vacancies from day one of an assignment.

The guidance – what is it and have you read it?

Prior to the introduction of any new significant employment laws being introduced the government produces a guidance document that walks through and explains how and what compliance will look like in practical day-to-day terms.

It is vital that all recruitment business leaders have read and understand the contents and implied terms of best practice in the guidance document.  It is also now imperative, that all temp consultants have read and understand the contents and implications. Clients have read it and are looking for help and support from their recruiters over specific issues contained therein.

Despite the assistance provided by the guidance, it is not the final say so that a lot of recruiters and ill-prepared umbrella companies were hanging their hat on.  It is not a statement of law, nor does it correctly interpret the law in all areas.  Ultimately it will be for employment tribunals to determine how the Agency Workers Regulations will be interpreted.

The final AWR guidance has now been published – click here to access the full document.

Umbrella Companies – how prepared are they?

It can be very varied, although there are a handful of market leaders taking a strong line and shaping solutions models for their market. The main alternative offering seems to be to adopt the pay between assignments contracts. However, high proportions seem to be looking to their recruiter partners to solve the issue for them. In my experience, umbrella companies are now being asked to attend scoping and solutions modeling meetings with clients.  This can sometimes come as a surprise to clients, who are on occasions unaware that their contractors and freelancers are actually paid by someone other than the agency!  This is also a massive opportunity for sharp and commercial umbrella operators to take the agency out of the equation post 1st October 2011 and provide their own contingent workforce – time only will tell as to the take up, the viability and the responsiveness of umbrella providers.  Ask them, have they and their teams read the guidance and what are their plans post 1 October 2011?

Taking the lead

Adecco undertook a study this year and the results are shocking. 80% of HR professionals surveyed said that they had no idea of the costs and consequences of the AWR and 61% said that they did not even know that date of introduction of the legislation! That in itself puts massive pressure on the agency to guide, advise and support its clients and their HR staff responsible for implementation. There is no one size fits all solution, so what is right, just and equitable for each client?

There is still a massive appetite for learning and understanding of the subject.  Many recruiters have delivered client and prospect seminars, designed fact-sheets and information portals.  How accessible is your knowledge and information and is it being delivered in a way that is right for each client?  It is simply not enough for you and your board of Directors to be comfortable and confident in the Regulations and its requirements.  Have you trained your consultants and support staff and can you demonstrate that knowledge across your whole business?  Training also needs to be extended your to Finance team, Compliance, and IT staff.

Address your stakeholders and be prepared to talk to different decision makers

You may have had a wonderful relationship with hiring managers in client organisations, but new buying units maybe emerging, driving AWR dialogue and decisions.  You may now be embarking into new relationships with other decision-making units in client organisations who are strangers.  Work needs to be done to address who is the ultimate decision making unit in the AWR journey?  It is often a combination of HR, Procurement, Resourcing, Internal Recruitment as well as Finance.  Have you addressed the kind of language these professionals use?  What will success look like for each of these stakeholders and collectively for their organisation?

Software providers

Many of the temp software providers are launching their AWR compliant solutions.  Again, beware of the one-size fits all package.  Get your provider(s) to demonstrate their offerings and if needed have it amended so it works for you.  Involve them in your scoping and solutions meetings with clients.  If you are not sure they are up for the task, start looking now for alternative providers who do have the ability to provide bespoke offerings.  It is going to be a vital aspect in AWR administration around flagging up and calculating of the twelve week qualifying period, so make sure the package is fit for purpose and beyond.

Comparator data and customs and practices

This is probably the single biggest aspect that our client hirers are asking for clarification on.  They need to know what the agency requires from them in terms of data and in what format that will be sourced and secured?  For those who have conducted AWR impact assessments with their clients, they will be aware of current

Day 1 rights in operation, but work needs to be done by HR and their recruitment partners as to what are the current customs and practices in their organisations that have been paid or undertaken with such regularity that it has become part of their contractual rights?  This relates to Day 1 rights and pay and benefits entitlements. Put strong emphasis to your clients HR professionals, for the need to undertake this exercise. Without the results, you are in a vulnerable position and at an increased risk of “noisy” conversations with temps who may believe they are entitled to more.

In-house staffing banks

Many labour intensive hirers have decided that they will reduce or try and expunge completely their exposure to the AWR by creating and operating their own internal bank of directly recruited temps.  Firstly, they need the skill and the resource to be able to do it effectively.  Secondly, they are still potentially at risk and could be deemed under the Regulations to be acting as a Temporary Work Agency (TWA) if they are involved in the supply of directly recruited bank temps to another company within their group which supervises and directs the temp worker, then such arrangements will be within scope of the AWR.  However, it should be remembered that temporary bank staff directly employed by the end user of their services will still benefit from protection under the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, and this can come as a surprise to hirers exploring this route as a viable alternative.

Pay between assignments contracts aka The Swedish Derogation

This is an alternative staffing model where the agency employs its temps direct on permanent contracts of employment, and can pay the temp less than its directly recruited counterpart in the hiring organisation.  However, the final guidance has made it clear it is only a derogation (another word for alternative or opt out) on pay rates and the temp must sign a written statement saying that they agree to forgo their entitlement to equal pay under the Regulations.

There has been speculation about adopting a one-hour a week contract model so that a TWA can take full advantage of this exemption.  The guidance indicates that paying an agency worker for a short period, which maybe as little as one hour, when there is in reality no assignment available, is likely to be viewed as an anti-avoidance measure, bringing fines of £5,000 per agency worker.

The guidance states that all agency workers, including those on pay between assignments/Swedish derogation contracts of employment will be entitled to:

  • All Day 1 rights in the hirers undertaking
  • Equal treatment in relation to the duration of working time, night work, rest periods and rest breaks
  • Paid annual leave after 12 weeks in a given assignment

Terminating a temp on a pay between assignments contract

What if an agency worker refuses a suitable assignment, when employed on a pay between assignments contract?

Firstly, you need really robust and fit for purpose discipline and grievance procedures and policies that support a pay between assignments contract.  It should clearly express the consequences for the temp it they refuse an offer of suitable, alternative work. Failure to accept, without good grounds could constitute gross misconduct.  Depending on the situation, if the agency worker refuses suitable alternative work, it may therefore be appropriate for the TWA to terminate the agency worker’s contract by reason of his or her gross misconduct with immediate effect and not pay the four week minimum amount (to the extent that it has not been paid previously).

Caution needs to be exercised here. The Regulations require the TWA has to set out in writing as part of the pay between assignments contract the hours, locations and the type of duties the agency worker can be expected to perform. Therefore, dismissing somebody for refusal to work which would then constitute gross misconduct must fall within those expected duties, and therefore be an unreasonable refusal by the agency worker which breaches their contract of employment.

Talking to your temps

Plenty of effort and energy has gone into dialogue with clients, suppliers and intermediaries around the AWR.  Plans now need to be put in place to discuss and inform your temps of The Agency Workers Regulations and what it means for them and who should they go to if they have a question or query?  Will fact sheets be available or will there be updated information on your company web page?  Make sure it’s in their language – overtly jargoned terminology will no doubt create confusion and concern.

What next?

  • Keep talking to your clients.  If you haven’t undertaken AWR impact assessments with them, do so now!
  • Work out what the actual cost of the regulations will be to you and to your individual clients
  • Design options that work – don’t commit to the pay between assignments contract model unless it is works for you
  • Ask your umbrella providers to demonstrate their understanding of the Regulations and provide details of their AWR plans. Where necessary, ask them to demonstrate how their options will minimise risk as well as keeping compliant and within the remit of the Regulations
  • Source software suppliers that offer solutions that work for you
  • Start putting in place new processes, policies and procedures for the 1st October 2011 implementation date
  • Inform your temps of their new rights and entitlements under the AWR and whom they should go to with questions or queries
  • Train your staff and your clients on The Agency Workers Regulations in a language that they understand

Workshops that actually work!

Fiona will be speaking at a series of national workshops in July 2011, specifically for recruiters. She will be giving support and direction on how to engage with hirers in the AWR buying process including:

  • Understanding the Regulations and being able to confidently communicate
  • Identifying the AWR buying unit
  • Buying unit requirements
  • Influencing the decision making process
  • Keeping on the PSL
  • Pre and post 1st October 2011 expectations


These workshops qualify for UK and International CPD and delegates will receive certification at no extra charge! For more information or to register for an event send your details to info@seminarsandsolutions.com

Seminars & Solutions provides employment law training and consultancy for leaders and line managers.

Fiona McKay

Managing Director

Seminars & Solutions

0161 905 1219



About the author:

Fiona McKay has over twenty years experience in law and training working previously for The Lord Chancellor, The High Court Bench, The Bar and Europe’s leading employment law consultancies. She has guided both UK and European organisations through the critical compliance of workplace legislation; delivering solutions in clear accessible language.

Renowned for bringing “life to law” she is regarded as one of the UK’s leading speakers on workplace legislation. Her unique skill is in creating bespoke training for recruitment sector Leaders and Line Managers, which is in their operational language. A regular contributor to news, television and radio, she has presented over 2,500 seminars and has trained some of the UK’s most successful leadership teams.

Fiona is an honorary graduate of Manchester Metropolitan University and in July 2010 became the first ever recipient of their business achievement award for entrepreneurship.

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