The Agency Workers’ Regulations (AWR), due to come into force in 2011, will be one of the most significant and highly-debated pieces of employment legislation in the last decade. Be prepared with this guide and stay up to date with any changes on HRzone.co.uk.

The new legislation will mean businesses will have to make huge changes to the way they use temporary agency workers, and will also increase the administrative burden on employers and recruitment agencies alike.

But why do we need an Agency Workers’ Regulations? The truth is that the legal status of temporary workers is currently unclear in UK law and the market as a whole is largely unregulated. As regards to the workers’ status, in some cases a temp will be an employee of the agency, in some cases the client user is the employer and in others, the agency will define the temp as self-employed. This means that, in practice, the temp is often outside a number of important employment laws applying to permanent staff, such as unfair dismissal claims and redundancy payments. Ultimately, the fact that the recruitment industry continues to be unregulated means more often than not, rogue recruiters are able to get away with paying agency workers less than they should expect for the job that they are doing.

Therefore, the main purpose of the AWR is to ensure the appropriate protection of temporary agency workers, irrespective of their legal and temporary status, and to address the unnecessary restrictions and prohibitions on the use of agency work.

The AWR in practice

By putting temporary agency workers on equal terms with permanent workers, with regard to pay and conditions, the AWR presents an enormous challenge for the recruitment industry and companies who recruit agency staff. This means organisations will need to gain tighter control of their agency suppliers, not to mention the pay rates the temporary staff are working to. Of course this will lead to a weighty administrative burden for client users and put strain on resource, not to mention inducing some heavy indirect costs. Meanwhile, agencies may need to increase charge rates and bring in more of their own staff if they are to make a profit and cope with the extra paper work respectively.

Of course, the other huge concern comes from the fact that the UK will be affected by this European regulation more so than any other country in the EU. Not only do we have more temporary agency workers than any other EU state, but we have more temporary recruitment agencies as well.

What you should already know about the AWR:

• The type of worker that will fall within the scope of the regulations
• How the AWR will affect umbrella workers and limited contractors
• A temporary agency worker’s rights to equal pay
• The qualifying period for equal rights and when the clock will be restarted
• The provisions included for training
• Who is liable for compliance
• What anti-avoidance measures the government is planning
• How you will calculate comparable pay
• How you will measure the time period of a temporary agency worker

Knowing your temporary agency workforce:

To tackle the implementation of the AWR you must have control and management of your current temporary agency workforce. This control will enable organisations to benchmark their permanent pay rates against their temporary pay rates by skill set, allowing them to forecast adequately for the future. The very basics you need to know include:

• Your current temporary agency spend
• The percentage by skill set
• The pay by skill set
• Whether supplying recruitment agencies are operating on different pay rates for the same job
• Any regional variances for the same job
• The average time worked by your current temporary agency worker
• The frequency of return by a temporary agency worker.
   

Evidently, there have been relentless debates regarding the necessity of the Agency Workers Regulation. Businesses and business organisations have also continued to express their concerns that this EU-derived piece of legislation is not adapted to meet the demands of the UK labour market. The main worry is that it could limit job opportunities at a time when a flexible workforce is crucial to the UK’s recovery from the recession. The debate, however, is over, and the focus is now directed towards the implementation and effects on UK businesses.

Although the legislation does not come into force until October 2011, organisations need to begin preparation now. Consideration needs to be given as to how they are going to place temporary agency workers within their business in the future to ensure they can still maintain an efficient, cost-effective, flexible workforce, without breaking the rules.

Matthew Sanders is chief executive of de Poel.

• Ed Miliband has written to David Cameron asking him to clarify proposed changes to the AWR. We will be updating any changes to the legislation as it happens on HRzone.