A Roadmap to Compliance for Agencies : Part 5

This is a guest blog by Chartergate

Engaging with Umbrella Companies: Part Five – The Agency Workers Regulations 2010 

When the Agency Workers Regulations (the “AWR”) came into force in October 2011, it immediately became a non-negotiable compliance ‘must’ for recruitment businesses. 

The AWR is specifically drafted for the recruitment industry.  As such, it provides for liability to be shared between the parties in the supply chain and/ or directed at the party or parties, most responsible for compliance failings.   Consequently, agencies cannot with certainty, rely on the contractual chain to shield them from liabilities. 

The AWR 2010: Agency Risk 

The AWR provides agency workers with rights based on the entitlements they would have received if they had been directly employed by the end-hirer, often termed as “parity rights".  These rights include a right to access the relevant facilities and amenities of the end-hirer, which is available from day one of an assignment.  The right to parity in of basic terms and conditions, including pay, are available to the agency worker after a 12-week qualifying period. 

With the AWR giving agency workers significant rights, it is vital that an agency ensures it has the necessary knowledge, administrative resources, client care processes and audit capabilities to ensure compliance and avoid employment tribunal liabilities.  Where there is an umbrella company in the supply chain, these requirements, in particular audit capabilities are heightened as the agency will have less control over critical compliance documents and processes.   

Roadmap to Compliance 

Our roadmap to compliance with the AWR includes the following steps: 

• Understand the Detail:  Ensuring that agency workers receive the correct terms and conditions requires an in-depth knowledge of the legislation including what is and is not included in the end-hirer’s  basic terms and conditions.  It is essential agencies have access to this knowledge. 
   
• Strong Audit Processes:  Liabilities for breaches of the AWR can sit with the agency, even where an umbrella company employs and pays the agency worker.  Some questions agencies should ask themselves are: 
  • Are we sure the umbrella is paying the agency worker parity pay?
  • Does the umbrella deal with AWR queries from agency workers compliantly?
  • Is the umbrella monitoring the qualifying period correctly?
  • Are we sure we are not falling foul of the anti-avoidance measures? 

It is vital that agencies can effectively audit their umbrella suppliers and their own internal processes to ensure compliance. 

• Strong Client Care:  With the access to facilities and amenities a liability primarily borne by the end-client, it is vital from a client care perspective that agencies understand this right so they can assist their clients with compliance. 

Monitor and Safeguard your AWR Compliance by RISC® Accrediting the Supply Chain 

At Chartergate Audit Services, we have a unique audit service which can be tailored to ensure it meets your commercial aims.  Importantly, we can audit the entire supply chain to assess to ensure compliance with the AWR.