Making Life Easier
An Introduction to AWR
The Agency Workers Regulations, effective from 1st October 2011, are intended to protect vulnerablelow paid 'agency workers' and to safeguard the positions of permanent employees from being undercut by lower-cost agency workers.
The Regulations give agency workers the right to basic working conditions and access to facilities equal to those enjoyed by comparable permanent workers employed by the hirer. The right to comparable basic working conditions are subject to a 12 week qualyfying period.
Who is an Agency Worker?
An agency worker is an individual who:
- Is supplied by a temporary work agency (recruiter and/or umbrella) to work temporarily under the supervision and direction excercised by a third party hirer (client).
- Has a contract with the temporary work agency which is a contract of employment, or any other form of contract to perform work and services personally.
The definition specifically excludes:
- Workers in business on their own account (e.g. PSC outside IR35)
- Workers not under the supervision and direction of the hirer (e.g. employed for a managed service contract)
- Temporary Workers engaged directly by the client
What right and entitlements?
Once you are staisfied that the worker is an agency worker, their rights and entitlements can be broken into 3 groups:
Day 1 Rights
- Access to collective on-site facilities (e.g. Canteen, Childcare or transport services) - this is not a special or preferential right, if there is a waiting list they join the queue!
- The right to be informed of job vacancies within the hirer's organisation (not does not give any preferential right to a job this is about information)
After a 12 week qualifying period the Agency Worker is entitled to further entitlements:
Working Hours & Holiday Entitlement
- The Agency Worker is entitled to same working times, breaks, shifts as a comparable permanent employee, or, as if they had been employed on a permanent basis.
- The Agency worker is entitled to the same holiday leave entitlement as the permanent employee, or, as if they had been employed on a permanent basis. This does not entitle the worker to additional holiday pay, this is purely an entitlement to leave.
Pay and Bonuses - This element has caused more controversy and confusion than another other element of the Regulation.
- After 12 weeks the Agency Worker is entitled to the same pay and performance related bonuses as a comparable permanent employee, of, as if they had been employed on a permanent basis.
Note - At no point is the Agency Worker entitled to employment rights, the Agency Worker is only entitled to the employment rights of their own employer (e.g. OrangeGenie).
Exploring the equal pay issue
Issue 1 - What's included in equal pay?
The calculation of pay will need to take the following elements into account:
- Basic Pay
- Holiday Pay
- Employers National Insurance
- Bonuses, related to personal performance
Issue 2 - How do I check equal pay of Contrator and Comparator?
We have provided a simple online awr calculator to enable you to get an indicative answer. For an accurate calculation please contact OrangeGene, we will provide more detailed advice and an accurate calculation.
Issue 3 - What now?
You should have arrived at a conclusion on whether the proposed pay rate for the contractor matches the pay of a permanent employee, or not.
If the pay rate matches, or exceeds, the pay of the permanent employee the contractor can be employed by OrangeGenie on a 'Matching Permanent Pay' basis.
If the pay rate is less than the pay of the permanent employee - and it is not possible to increase the rate - the contractor will need to be employed by OrangeGenie on a 'Pay between Assignments' basis, also referred to as 'Swedish Derogation'. OrangeGenie is only able to employ contractors on this basis if their assignment exceeds 12 weeks and the pay rate exceeds £12 per hour.