The consultation on modernising the Agency Work Regulatory Framework has now closed.

Lawspeed has assisted the Association of Recruitment Consultancies (‘ARC’) in formulating a comprehensive and detailed response, based upon our 3 decades of recruitment industry experience, feedback from ARC members and our recent seminar on this subject.

Whilst ARC and Lawspeed welcome the principle of reduced levels of regulation and administration, as outlined in the consultation, change needs to be fully justified and must be to the benefit of the industry. Our CEO and Chair of ARC Adrian Marlowe said “The continuing imposition of new rules on an already hard pressed industry can do nothing to promote the much needed growth the economy requires. Our response highlights the areas where change could be beneficial but at the same time identifies flaws in some of the thinking behind current proposals. This includes the proposed use definitions that muddy the difference between an employment business and an umbrella company, and the considerable risks that the industry and hirers stand to face from the upcoming introduction of guaranteed hours in relation to agency workers. History shows that a strong recruitment sector is a necessary element to help businesses grow particularly after a long period of downturn such as many sectors have been facing in recent years. New rules should be tailored accordingly.”

A copy of the ARC response can be found here: https://www.arc-org.net/consultation-on-mondernising-the-agency-work-regulatory-framework/

Key points

Key points addressed in the response, include

• Support for streamlining of documentation requirements, in particular the information included within and timing of Key Information Documents (KIDs) and candidate terms
• Support for the relaxation of transfer fee regulations whilst maintaining the principle that transfer fees should be payable
• Recognition that the application of guaranteed hours will affect transfer fees and margin charges to the detriment of business unless the reference period is at least 12 months
• The need for regulation to appropriately reflect all parties in the chain, including RPOs and MSPs, in particular as regards pay when paid arrangements and lengthy payment terms
• Support for screening of candidates to be less prescriptive and more of a contractual matter
• Objection to the proposal that employment businesses should be obliged to offer the workers choice as to whether to work through an umbrella or PAYE
• Support for either retaining the limited company opt out for PSCs, or removing PSCs from the scope of the conduct regulations altogether by aligning definitions with other legislation, such as the AWR or Off payroll rules 
• A re-assessment of the AWR, the 12-week qualifying period
• A review of the activity of umbrella companies, to be reflected in a better more appropriate definition

Next steps

Once responses are considered we can expect a further consultation on draft legislation, with new rules expected at some point in 2027.

If you would like to have your say an are interested in joining ARC, email info@arc-org.net