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The Agency Workers Regulations, National Minimum Wage and unfair dismissal

The Agency Workers Regulations, National Minimum Wage and unfair dismissal

Adrian Marlowe

Adrian Marlowe

The 1st of October 2011 saw three significant changes affecting employment relationships and the recruitment industry. The long awaited Agency Workers Regulations 2010 (“AWR”) are now in force, the National Minimum Wage has increased and we no longer have a default retirement age.

For anyone who is not already fully aware of the AWR and its implications, it represents the most significant legislative change for the recruitment industry in many years. Agency workers whether already on assignment on 1st October, or starting afterwards, will have new rights. These are as follows:

  • To have access to collective facilities and amenities on the hirer sites and to be notified of suitable vacancies with the hirer from day one of their assignment.
  • After a 12 week qualifying period, the right to receive the same pay and basic working and employment conditions as they would have received has they been engaged directly by the hirer at the start of their assignment. Pay excludes payments such as occupational sick pay, pension, redundancy pay, pay in respect of maternity, paternity or adoption leave, any bonus or incentive payment which is not directly attributable to the amount or quality of work done by a worker to encourage loyalty or reward long-term service, expenses and some other statutory payments (as set out in regulation 6(3) of the AWR).

There are a number of options available as to how to address this new legislation, whether this involves obtaining information from hirers and applying the legislation, applying a Swedish derogation model or seeking to exclude individuals from the scope of the legislation. What is essential in every case is that all parties in the recruitment chain gain a full understanding of the new legislation and how it will impact upon their arrangements.

We have also seen two further legislative changes; firstly the National Minimum Wage has increased from £5.83 to £6.08 per hour for those aged 21 and above (with increases to other applicable rates also), and the default retirement age of 65 has now been abolished. This means that any attempt to retire staff has to be handled very carefully, in accordance with usual unfair dismissal rules and with specific legal advice.

Whilst the above changes are already in force, this week has also seen an announcement regarding possible future changes to recruitment and employment related legislation. BIS has announced an intention to increase the period of continuous service required for most unfair dismissal claims from 1 to 2 years. This is intended to have effect from April 2012 and will make it easier for employers to end the employment of staff with between 1 and 2 years’ service. In addition to this proposed change, the Government has also this week launched a 3 week consultation on existing employment related regulations, in order to determine whether it is required or not. This is as part of the Government’s ‘red tape challenge’ and allows members of the public and any interested parties to comment directly on employment related regulation and whether there is a need for it to be retained or removed. Full details can be found at https://www.gov.uk/government/news/red-tape-challenge and it is worth noting that the regulations under consideration include the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and the gangmasters legislation.

There was also a further announcement made at the Conservative party conference, indicating plans to introduce fees for employment tribunal claims, with commentators suggesting fee levels of £250 to lodge a claim and a further £1,000 once the matter is listed for hearing, with exemptions for those on certain benefits and higher fees for high value claims. Please note this is not yet law, and it is intended that there be a consultation on this issue in November 2011. The intention is that the new fees regime will be applicable in 2013.

For specific advice on any of the above matters, please contact Lawspeed on 01273 236 236.

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