AWR draft guidance - REC response

Filed under Press release

Thursday, 31 March 2011

Released on 31 March 2011

The REC has given an initial assessment of the long awaited AWR guidance which is due to be published tomorrow by the Department for Business, Innovation & Skills (BIS).

Tom Hadley, the REC's Director of Policy and Professional Services, says:

"We recognise the genuine effort that was made to consult and take on board the views of recruiters. Our initial response to the guidance is mixed but we had concluded some time ago that the document would not be the ‘be all and end all’ in terms of making the AWR workable for them.

“Some of the main areas of uncertainty and concern for recruiters - such as the tracking of the 12 week qualifying period, the definition of pay and the mechanics of demonstrating equal treatment - have been covered. Other positive areas are the use of practical examples and flow charts within the notes which will be useful and more clarity on which bonuses are in and out of scope of the Regulations.”

Other positive points in the guidance notes include:

• Where the client's annual leave is greater than the statutory entitlement the agency can roll up the additional holiday within the hourly rate (though they still cannot roll up the statutory entitlement).  This is an important win for the industry;
• The right to access vacancies does not apply in the context of a genuine headcount freeze. This is of concern to many clients at present as they are undergoing corporate restructures;
• There is a long list of payments which are included in or excluded from the definition of pay.  This is useful though further discussions are needed on whether to include childcare vouchers in this.

However, some of the points of interpretation on which the REC takes issue include:

• The REC would like to see a checklist for assessing whether someone is genuinely self-employed or not. This is key for agencies, that have to work out whether an individual is within scope or out of scope of the Regulations;
•  A number of questions over what is in and out of scope remain. For example, specific issues such as whether subsidised meals are within scope have not been dealt with;
• Question marks remain over the practicalities of developing 'Swedish Derogation' models. The guidance does however make it clear that agencies and clients will not be able to intersperse periods of assignments with short working weeks.

Hadley concluded:

“Do we now have all the answers? No, but this was never likely to be the case. It is also important to bear in mind that whatever the guidance says, tribunals will be free to make their own calls.

“As well as making the most of the two week window to get back to BIS on the guidance, our priority is to continue engaging with some of the UK’s leading law firms to build a legal consensus on key areas.  We will also continue to provide the best possible practical support for recruiters and to engage with employers and Trade Unions on implementation issues.”

There will be a short consultation period of around two weeks to enable further comment on the published draft. As well as co-ordinating an industry-wide response, the specific views of different REC Sector Groups will also be taken forward with BIS.

The guidance is due to be made available on the BIS website tomorrow (Friday April 1).


Contact: Ed Sexton

Phone: 020 7009 2192

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