© Copyright Ads Infinitum 2011-2012 AGENCY WORKER REGULATIONS MADE EASY The content of this slideshow is provided in good faith. Those using the content.

© Copyright Ads Infinitum 2011-2012

AGENCY WORKER REGULATIONS MADE EASY

The content of this slideshow is provided in good faith. Those using the content do so at their own risk, since the agency cannot accept responsibility for the consequences of any inadvertent misadvice.

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● The AWR is EU legislation, so it would be very difficult to revoke

● The UK regulations were supposedly finalised in October 2010

● AWR applies from 1st October 2011

● Political pressure in the UK is therefore virtually pointless

● There is no opt-out mechanism

● There will be fines of up to £5,000

● The AWR does not impose employment status between the worker and the hirer

● Only basic terms and conditions will apply

The ORIGINS of the AGENCY WORKER REGULATIONS (AWR):

● It should establish equal treatment for agency workers in comparison with those recruited directly by the hirer

● There’s a 12-week qualification period before the worker’s entitlement to equal treatment takes effect (apart from the ‘from-day-one’ entitlement to use the canteen, loos and access the school’s vacancies)

● The hirer, according to current Department for Education and REC guidance, is almost certainly going to be interpreted as being the school (and not the local authority, even if a teacher works for 12 weeks with one authority but in different schools). This is because the school is considered to be in a position to supervise and give guidance, whereas the authority wouldn’t be. And it seems to be relevant that schools have governors; if so then school is the employer (academies seem not to have governors). But test cases in the courts are almost inevitable!

● That equal treatment is limited to basic terms and conditions

● The AWR define those basic terms and conditions

WHY ARE WE BEING SADDLED with the AWR?

The AWR should protect workers who:● Are supplied to a hirer through a temporary work agency● Are supplied to a hirer through an intermediary (such as master or neutral vendors, or

so-called umbrella companies)

Yet workers who are genuinely self-employed, which may include certain limited company contractors, are not covered

Agency workers cannot opt out of the AWR and agencies will face fines of up to £5,000 for breaches

Agencies should not risk trying to get workers to sign away their rights in respect of AWR

WHO is PROTECTED by the AWR?

● To get equal treatment the agency worker must have worked in the same role with the same hirer for 12 continuous calendar weeks

● There can still be a break of up to 6 weeks during or between assignments in the same job for the same hirer

● The clock is also re-set if the worker is placed in a new or significantly different role● That worker does not have to have worked those 12 weeks with the same agency – only

in the same job and with the same hirer● The time is measured strictly in weeks, however many hours are worked in each week

WHEN DO the AGENCY WORKER REGULATIONS KICK IN?

Several situations can pause the 12-week clock:● Absence with a doctor’s note or certificate● Documented public duties such as jury service● Planned workplace closure such as closure at Christmas and the New Year● Industrial action● Annual leave● Possibly other circumstances such as unplanned workplace closure in the event of fire or

industrial accident

PAUSING the CLOCK:

Some situations will not pause the 12-week clock, including:● Pregnancy-related absence● Maternity leave● Adoption leave● Paternity leave

NOT PAUSING the CLOCK:

● The right to be informed of vacancies within the hirer’s organisation● The right to access the same amenities and facilities as direct employees

WORKER RIGHTS THAT ENDURE THROUGHOUT THOSE 12 WEEKS:

The equal rights that commence after the 12-week qualifying period include:● Any and all pay (including productivity bonuses, holiday pay and overtime)● Fringe benefits such as awards, vouchers, vehicles, fuel allowances etc● Duration of working hours● Rest periods and breaks● Holiday pay (which can be paid in lieu)● Access to amenities and facilities (unless there is an overriding reason why not)● Access to in-service training

WORKER RIGHTS THAT COMMENCE AFTER THOSE 12 WEEKS:

Some equal rights will not apply after the 12-week qualifying period. They include:● Pensions● Maternity and paternity pay and rights● Redundancy payments● Sick pay● Notice● Pay in lieu of notice● Advances against pay

WHAT RIGHTS WON’T COMMENCE AFTER THOSE 12 WEEKS:

● Ordinarily agency workers can be paid in the same way as they’ve historically been paid● Workers must be given access to job vacancies with the hirer, but there is no

requirement to otherwise change selection procedures● Pregnant women do have a right to paid time for ante-natal appointments● Health and safety regulations apply for pregnant agency workers or new mothers. This

includes the provision of reasonable alternative work when required or payment for the duration of the assignment when no alternative suitable work exists

KEY CONSIDERATIONS:

● A ‘comparator’ is a person with whom the agency worker can fairly be compared ● Establishing this benchmark is a vital step in the enforcement of equal treatment● A comparator would normally already be employed by the same hirer● A comparator would normally be doing the self-same job as the agency worker● If it’s not the same job then broadly similar work would suffice● The level of skills and qualifications may need to be taken into account if they are relevant

to the work● Where the hirer doesn’t have a suitable comparator, then one can be chosen from a

similar establishment● Because only a similar establishment is used then access to collective facilities

and amenities is ruled out

KEY COMPARATORS – WHO THEY ARE & WHY THEY’RE IMPORTANT:

Details of agency workers must be provided during:● Collective bargaining● Collective redundancy● TUPE - Transfer of Undertakings (Protection of Employment) Regulations 2006● Other statutory consultations

WHEN AGENCY WORKERS MUST FIGURE in HEAD-COUNTS:

● After completion of the qualifying period the agency worker may make a written request to the agency

● The agency then has 28 days to provide information on the worker’s new entitlements● If, after 2 more days’ grace, the agency worker has not received details from the agency,

then the agency worker may make the same request directly to the hirer● The hirer then has 28 days to respond● If there is no resolution then, the agency worker may take their complaint to an

employment tribunal● It is not clear that the agency worker must take their query directly to the hirer if the

agency does not comply. It may be that they can immediately issue a complaint to an employment tribunal

HOW DOES AN AGENCY WORKER INITIATE A CLAIM or COMPLAINT?

● The agency itself is notionally responsible, overall, for ensuring equal treatment● The agency can therefore be liable if that equal treatment isn’t provided● Nevertheless, if the hirer won’t provide the relevant information then the hirer is liable● This means the agency has to document attempts to get information from the hirer (and

any refusal of the same)● The hirer is also liable for ensuring agency workers have access to facilities and job

vacancies● Ultimately an employment tribunal would decide who is to blame

WHEN AGENCY WORKERS MAKE A CLAIM WHO PAYS?

• Currently agency workers are, on average, paid 80% to 90% of what a directly employed equivalent worker would earn

• This could mean that pay costs might rise by as much as 20% for the hirer• It is thought, though, that an overall cost increase of 10% is more likely• There are other administrative costs too, reckoned at 1-2 hours per qualifying agency

worker – in both the agency and the hirer’s business• The impact will depend on the number of agency workers in the hirer’s organisation• The impact will depend on the hirer’s willingness to retain an agency worker for in

excess of the qualifying period (however many agencies they’ve worked with to achieve this)

HOW DO THE AGENCY WORKER REGULATIONS AFFECT HIRERS?

HOW MUCH WILL THIS COST THE AGENCY?

You’ll have to do the maths. But you’ll need to cost in the following:● Impact assessments● Benchmarking● Pay● Bonuses● Holidays● A policy review● Sundry administrative and risk-management expenses

HOW MUCH WILL THIS IMPACT ON THE AGENCY’S ADMIN?

You’ll need to consider the following:● Collecting information on comparators● Sharing that information on comparators● Generating other market intelligence● Upgrading your paperwork● Re-jigging your management information system and controls

LISTING THOSE ADMINISTRATIVE TASKS FOR THE AGENCY:

● Brief clients and agency workers alike in an unambiguous manner

● Record, calculate and flag up the 12 week qualification period for every worker

● Generate and manage the completion and utilization of data from a questionnaire in which consultants collect that on comparator pay and conditions

● Store data provided by clients which can then be confirmed at the time of subsequent orders

● Record an audit trail of who provided the information – and when they did so

● Calculate compliant pay rates, holiday pay, National Insurance, additional pay and/or bonuses where applicable

● Liaise with agency workers to confirm pay and fringe benefit details - as well as permanent vacancies in their assigned workplace

HOW SHOULD THE AGENCY CONTAIN OR MODERATE ANY RISK?

You’ll need to consider the following:● Reflect the new regulations in your written policies● Reflect the new regulations in your contracts● Upgrade paperwork to keep track of qualifying periods, comparators etc● Consider the impact of the new regulations on agency-led long-term hires● Ensure compliance to reduce or eliminate liability● Move towards paying-to-scale anyway may help● Liaise with the worker – in particular so you know if they’re in the same workplace but

employed by another agency

IS THIS BAD NEWS for SCHOOLS?

Yes. Because they:● Have to allow what is, in effect, an increased cost of 10% - to 20% on agency workers● If they employ directly instead they face another barrage of recruitment costs● May have to employ less experienced staff instead to allow them to pay less● Have an increased administrative burden tracking agency workers and comparators● Will have this complicated if multiple agencies employ the same worker● Will be faced with difficult and challengeable decisions – like whether jobs are

comparable – which may have consequences if there’s a misjudgement

IMPORTANTLY, DOES THIS MEAN MORE EXPENSE for SCHOOLS?

It’s perhaps not all bad news. The table below shows how the charges will now work.

POINT on PAY SPINE PREVIOUS RATE CHARGED CHARGED from OCTOBER 1st 2011

ARE THERE ANY STRATEGIES WHICH MIGHT EMERGE?

● Some schools may find it administratively easier to switch to a single agency

● This may indeed herald the use of more master vendors – or similar

● There will be a need for agencies and schools to sit down together and crunch more numbers

● There may be an increased effort to avoid using supply staff – reducing or stopping their use altogether

● There may be more fixed-term contracts (of under 12 weeks)

● Some schools may offer equal treatment from the outset anyway – going beyond their statutory obligations

IS THIS A DEATH KNELL FOR AGENCIES?

No. They will continue to have a role because they:● Allow flexible just-in-time resourcing● Let hirers try before they buy● Have immediate access to large and experience-rich candidate pools● Are efficient in the process of screening including CRB checks (including List 99)● Save time when hirers are themselves overburdened – keeping daily supply viable● Can offer agency workers at a fixed and affordable rate for up to 12 weeks anyway● May save money when an expensive highly-experienced employee is being replaced● Currently earn perhaps £100K in an average school, which is an indication of their worth● Are seen to assimilate risk – important given the rising blame culture● May find that this encourages an earlier transition to long-term placements● Still enjoy the economies of scale that a school doesn’t have

WHAT ARE THE BIG OUTSTANDING ISSUES?

● There will be ongoing discussions about liabilities to pay teachers during the Summer holidays, and perhaps for other holidays, not least because teachers might well be entitled to such payment commencing immediately after 12 weeks’ work. This will be a very substantial financial liability for agencies – particularly the smaller ones. The holiday pay could well wipe out any margin

● Schools may as well put teachers onto a rolling contract after 12 weeks and, in effect, permanently hire them

● Agencies may start to underpay teachers for the first 12 weeks in order to build up a margin (to pay for holidays etc)

● Agencies may well not want to be contractually bound where they cannot make a margin● Other behaviour that is not in the best interests of the profession may occur as the result

of budgetary strains on schools and agencies, including deploying fully-qualified teachers during the qualifying period but paying them as if they were classroom assistants / supervisors

● The so-called ‘Swedish Derogation’ model may create a new distinction (see the next slide) and be applied to better teachers who almost ‘opt out’ of AWR

WHAT is the ‘SWEDISH DEROGATION’ MODEL?

● This term relates to the opt-out clause negotiated by the Swedish delegation when the Agency Workers Directive was debated at EU level

● It means that the AWR rights to equal pay of an agency worker no longer exist when agency workers are employed on a permanent basis by their umbrella company or temporary work agency and receive pay between assignments

● The agency worker must be genuinely employed by the umbrella company or agency with a permanent contract of employment in place

● The contract must commence before the worker’s first assignment

● The recruiter or umbrella assumes all legal responsibilities under AWR

● Hirers will need to conduct due diligence to ensure that the agencies and umbrella companies they are working with are applying the Swedish derogation model correctly and have the financial strength to honour the ‘non-assignment’ payment obligation

● This non-assignment payment obligation would mean guaranteed pay – even during holidays

● This model may only be selectively applied to better teachers

CHECKLIST for SCHOOLS. WHAT the AGENCY NEEDS YOU to DO:

● Keep records of cumulative days every individual agency worker spends at your school, whoever sends them to you

● Ensure from Day 1 that all agency workers are given the same facilities (toilets, canteens, access to job vacancy information etc) as their full-time permanent counterparts

● Ensure that you know whether an agency worker enjoys special status under the ‘Swedish Derogation’ model

● Talk with the agency. If we know the answers we’ll share them!

COMMERCIAL IMPERATIVES – and WHAT THEY MEAN to SCHOOLS:

● The big worry for agencies is that they supply a worker to a school for 12 weeks and then find themselves liable to pay for an extended period of time for which the agency cannot charge anybody. This would include the 6-7 weeks of Summer holidays in particular

● Clearly agencies cannot afford to subsidise state education in this way; the teachers’ down-time would more than wipe out any profit

● This is in an era when many teacher supply agencies are struggling. It is not as profitable a sector as it once was. Yet the state is reliant on their efficient service and their ability to find, vet and deploy teachers on a daily basis

● For this reason there have been protracted requests that the legislation is adjusted, ideally to make teacher supply agencies a special case. This may yet happen

● It is prudent for schools to assume that they will have to pay, one way or another, for ‘their’ supply teachers (i.e. teachers who’ve been on their premises for the qualifying period) during subsequent ‘down-time’

CONTACT for FURTHER INFORMATION:

Vida Education, Office 8, Evans Business Centre,

Sycamore Trading Estate, Blackpool FY4 3RL

Tel: 01253 340 551

Website: www.vidaeducation.co.uk

Email: [email protected]

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