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UK – Staffing firms and agency workers frustrated about “unclear” AWR

07 June 2012

The Agency Workers Regulations (AWR) was implemented in the UK last year but has not been well received according to new research which claims that almost 60% of agency workers say they have received little or no change in their remuneration while just over 60% of employment agencies feel their experience of the legislation has been negative.

The AWR was the most significant legislation to affect the UK’s private recruitment industry. It ensures that all organisations hiring agency workers for assignments of 12 weeks or more will offer these workers the same terms and conditions relating to pay, working hours and holidays as those of permanent employees.

“There is no doubt that agencies have had to invest heavily both in terms of time and money in ensuring that they have the systems necessary to ensure full compliance,” said Simon Garbett, Chairman of The Employment Agency Movement (TEAM) which undertook the research.

“There have also been difficulties with engaging end user clients who have tended to perceive the AWR as a matter for the agency and not for them.”

Respondents were also frustrated about the lack of clarity with the AWR as the regulations are still open to some interpretation.  Many expressed disillusionment at being repeatedly told by their advisors that ‘we will need to wait for case law.’ 

“The problem with this approach is that some believe that they may well end up as the case!”, added Mr Garbett.

The survey by TEAM in conjunction with the Department for Business Innovation and Skills compared temporary usage during the first quarter of 2012 with the first quarter of 2011, monitoring views of agencies which manage over 20,000 temporary workers across the UK.

It revealed that over half (53%) have had to increase their charge rates as a result of the AWR and over a third (36%) have seen a negative impact on margins. Respondents also reported an overall net decrease in the use of temporary workers of 16%.

Over a quarter of agencies (28%) had opted to use ‘The Swedish Derogation’ under which agency workers are engaged on permanent contracts. The derogation guarantees workers minimum levels of payment between agency assignments.

These latest findings contradict a study by Adecco in March which found that over three quarters of employers say that the AWR has had no impact since its introduction in October 2011.

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de Poel

Claire Doherty 08/06/2012 10:30 am

There does seem to be some debate about whether or not AWR has had a material impact upon demand for temporary agency workers. de Poel’s view is that there has not yet been a significant downturn in demand within our client base, which I think reflects the importance of temporary agency workers to UK businesses, as well as, I hope, the work done by de Poel and our clients in preparing for the regulations and keeping disruption and cost to a minimum.

That said, we have noticed one significant change over the past year. AWR has forced hirers and agencies to work more closely together. Organisations are seeking contingent workforce models which cultivate a direct relationship with all suppliers, whilst injecting processes to ensure compliance and monitor service levels, similar to that of a neutral vendor.

In meeting with organisations on a consultative basis, it is clear businesses are more conscious of the standard of service being provided by their agencies and questions are being posed regarding conformity against their statutory and contractual obligations, the law in general, our compliance audit processes, as well legislative expertise. The quest for legislative knowledge will continue with the imminent pension auto-enrolment initiative; the challenge for the recruitment industry will be one of compliance assurance to warrant the use of flexible workforce, which is paramount to a recovering economy


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