Press Office
Confusion over scope of agency regs
Tue 9th Mar 10 - 9:52
Shout99 has in the last month published an article on ‘Confusion over scope of agency regs'
Confusion continues to surround the Agency Workers Regulations as one recruitment body queried whether limited company contractors would actually be excluded as believed.
The EU-inspired initiative, which must be implemented by the UK Government, gives similar employment rights to temporary or agency workers after 12 weeks. There had been concern that, while it was intended to protect vulnerable workers, this would unintentionally include freelancers.
These fears were allayed to some extent when the Government announced that limited company contractors operating in a 'genuinely self-employed manner' would be excluded. (See: Ltd company contractors excluded from employment rights - Shout99, Oct 2009)
However, now that the Regulations have been laid before Parliament, the Association of Recruitment Consultancies has queried whether they do exclude limited company contractors.
Adrian Marlowe, Chairman of the Association of Recruitment Consultancies, said: "The picture is very different. The Government response document makes it clear that the idea of an exclusion for those operating through limited companies was rejected, and this is reflected in the Regulations. Instead the Government provides that an individual is not an agency worker if that individual runs his/her own business and the contract provides that the hirer is a customer of that business.
"The test of whether an individual actually has a business, rather than simply operating through a limited company, is designed to winkle out sham arrangements, and Government policy is stated to be that this will be a matter for Employment Tribunals to assess. What is very clear is that the use of a limited company as the operational vehicle for an agency worker is not in itself a silver bullet.
"Whilst guidance in this area is expected, the fact of the matter is that an agency will have to check whether a contractor operating through a limited company is actually in business. This will add yet another layer of administration to agencies as well as uncertainty, and for the Government represents a lost opportunity for clarification."
For more information please see http://www.shout99.com/contractors/
