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UK – AWR mock tribunal rules for joint liability

24 October 2012

It has been over a year since the Agency Worker Regulation (AWR) was enforced with legal claims expected to be brought forward in the near future. Therefore Frances Lewis of law firm Osborne Clarke organised a mock tribunal yesterday, providing useful insight into how a complex multi-party AWR claim might be dealt if it reached tribunal.

The event, attended by Staffing Industry Analysts, focussed on a hypothetical claim which involved an umbrella company contractor who was supplied via an agency and a managed service provider (MSP) to work as an IT analyst for a large bank.  It centred around a claim for enhanced paid holiday and bonus rights. 

The mock tribunal highlighted the difficulty in settling this type of claim as a party cannot easily settle a claim which involves other respondents who are facing the same claim but refuse to co-operate.

In reaching his judgment the “tribunal” chairman, Julian Hemming of Osborne Clark, commented that as this was new law, a tribunal would almost certainly err on the side of caution in deciding who was responsible and therefore liable for the breach. 

In the final decision, the MSP and the agency were found to share primary responsibility and therefore liability for the breach with the bank also found liable to a lesser extent. 

A key point that came out of the hearing was the importance of agreeing clear procedures for the exchange and passing on of comparator information and for dealing with information requests, whether they be formal written requests or otherwise.

On the question of indemnities, the tribunal judge made it clear that they would be of no concern to the employment tribunal – if a supplier had agreed to indemnify a hirer or MSP, the value of that indemnity would be a matter for the High Court (which may decide that whoever is relying on the indemnity has a duty to mitigate their loss) and of course an indemnity is only so good as the indemnifying party’s ability to pay it.

Adam Pode of Staffing Industry Analysts, who played the part of tribunal panel wing member, said: “What I found very interesting were arguments around whether a temporary worker was entitled to cherry-pick benefits in their claim such as bonuses or holiday pay despite being paid more in total than their regular counterpart. The feeling of the panel, if not all audience members, was that they could.”

This comes after Osborne Clarke’s recent staffing supply chain survey revealed that 30% of those responding had either received an AWR claim or an information request. Claims are starting to occur, but details of these may not reach the public domain.  

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