Contractors should be able to rest easy now that the Department of Business, Innovation and Skills has released guidance showing how the new Agency Workers Regulations (AWR) are likely to impact on their livelihoods. Or can they? Do any contractors really stand to gain once the AWR come into force in October 2011?
Realistically, how big a problem is inequality in the contracting sector? Two years ago ContractorCalculator asked contractors whether they wanted the additional employment rights of equal pay and conditions proposed by the then Agency Workers Directive. A resounding 92% of respondents said ‘no thanks’.
So, are the vast majority of well-paid contractors really likely to claim equal treatment under the AWR? Or is the problem really focused on a small minority of contractors being paid less than or close to their permanent counterparts? If so, that means that the AWR for most will be a pointless exercise in additional, costly administration, just to prove that irrelevant rules are being obeyed.
The winners could be those umbrella company workers whose solutions providers decide to take it on the chin and implement an alternative business model, such as that provided for by the ‘Swedish Derogation’. These contractors could be embarking on a journey into a brave new world of genuine talent management, in which they get paid between assignments and their umbrella solutions providers help find them work. But they are likely to be in the minority, as only a very few of the biggest and best run umbrellas are likely to be able to adopt this strategy.
And what of the lower paid and vulnerable workers these regulations were designed to protect? We recently heard from one such low-paid contractor, who was told that as soon as the AWR comes into force in October, she will only be allowed to work for a further ten weeks and then she’s out, because the client will simply rotate contract staff as required.
Through the current fragile economic recovery, employers are unlikely to suddenly start paying temporary workers more, no matter what the new regulations say. Sadly, therefore, people are going to find their contracts aren’t renewed, or they will lose their jobs and not be re-hired.
The winners will be few. And, in a cruel twist, the losers are likely to be the very low-paid and vulnerable workers the AWD was originally intended to protect.