Andrew Tugwell of South Wales based Acorn warns about new agency worker regulations that could hit up to one in every four UK businesses.
“There’s a new piece of legislation coming into force next weekend that will impact on one in every four businesses in the UK – and the worrying thing is many of them are still not yet geared up for it.
The Agency Workers Regulations, which finally becomes law on October 1, will affect every business that relies on temporary agency workers, and there are around 1.3 million of these highly-flexible and key people currently working in a whole range of sectors from manufacturing, engineering, and food production to project management, clerical and administrative positions – from minimum wage earners to those on £800-plus a day.
The legislation is simple, but dramatic in its outcome, as it aims to provide agency temps with equal treatment to permanent staff once they have been with the same employer, working on the same job for 12 weeks.
It means parity of pay, including overtime, shift allowances, unsocial hours’ payments and bonuses, breaks, rest periods and holidays – including public holidays – and will clearly have a major financial impact on businesses that rely heavily on agency temps.
As one of the UK’s leading recruitment and training companies, we have found ourselves at the frontline of this new legislation, and we have been preparing ourselves – and our clients – for it over the past two years. We have been looking at ways to mitigate any increased costs to clients and raising awareness of the legislation by hosting a number of seminars throughout Wales and the UK. In addition, we have worked closely with a number of the professional bodies instrumental in shaping and communicating the new law.
We have created a number of business models that in some cases will go some way towards mitigating the increased costs which, for some companies, could be so considerable they could seriously compromise the viability of the business.
Though we do have a number of other customers who say they are planning to bite the bullet and pay for parity. For some of those, however, the difference they face in costs is not that great.
For others, the AWR will spell an entirely different story – one of our clients could have faced extra costs of £2m a year, which is clearly not sustainable if they wish to continue operating flexibly and competitively. Businesses like these have no option but to look at new ways of managing their temporary workforce and mitigating additional costs.
But with just five days to go before the law hits the statute books, the big worry is the number of businesses to be affected by the AWR that have still not decided how they plan to tackle it. These companies need to seek advice from experts like ourselves as a matter of urgency, as they have to make up their minds whether to simply provide pay parity or to consider business models that will help them to mitigate the extra costs.
Whilst we have been preparing for the AWR with our clients, it is estimated that around the UK some 60 per cent of businesses that should be making plans for AWR have still not decided how to approach it – and time is rapidly running out for them. Penalties for failing to comply include fines of up to £5,000 for deliberate avoidance, plus a minimum award of two weeks’ pay to affected agency temps, so it is extremely important that this issue is addressed.
Here at Acorn we have a detailed understanding of what the implications of the regulations are to all businesses, and we have solutions that allow companies to reduce their exposure to both significant cost increases and associated AWR claims, while allowing them to continue to enjoy the benefits of a flexible workforce.”