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Contracting sector must adopt Agency Workers Regulations without changes

Contractors and contractor services firms lobbying for last-minute changes to the Agency Workers Regulations (AWR) have had their hopes of clarifying and improving the regulations for contractors dashed. Ed Davey, the Minister for Employment Relations, has confirmed that no amendments will now be made before the regulations come into force in October 2011.

This means that agency payroll and umbrella contractors will be covered by the regulations, despite the fact contractors do not typically fall into the category of ‘vulnerable workers’ that the regulations were designed to protect. Contractors and their suppliers may now find themselves subject to potentially expensive and damaging legislation as a result of the ‘law of unintended consequences’.

Davey has said that, despite concerns from the industry about elements of the regulations that may be unworkable in their current form, it has not been possible to make changes. He blames this on the Trades Union Council (TUC) and the Confederation of British Industry (CBI) failing to “find a way forward that would be acceptable”.

Agreement from the TUC and CBI would be essential before any changes could be made to the regulations as they stand, because the original Agency Workers Directive (AWD) was only accepted in May 2009 on the basis of a deal struck between the two organisations. So changes made without TUC and CBI agreement could be challenged in the courts.

In a statement issued by the Department for Business Innovation and Skills (BIS), Davey says: “We will instead now use the time that is still available before the Regulations’ enter into force to develop the best possible guidance to help employers comply with their new obligations.”

The Agency Workers Regulations form the mechanism that will implement the European Union’s Agency Workers Directive. This is designed to provide agency workers with the same pay and rights as permanent employees performing the same duties.

Published: 20 October 2010

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