‘Self-employed checklist’ for AWR divides recruiters

Recruiters appear divided on how the government should help them assess whether a worker is intended to be outside the Agency Workers’ Regulations (AWR) for being “genuinely self-employed.”

Responding earlier this month to the publication of the draft AWR guidance, the Recruitment and Employment Confederation called for a checklist to be drawn up for agents to identify workers who are ‘in business on their own account.’

But another agency staffing body, the Association of Recruitment Consultancies, yesterday signalled that such a checklist for self-employment, far from making agents’ lives easier, would actually increase their exposure.

“It would not be helpful to include self-employment tests in the guidance on the basis that a tick-box approach would open recruiters up to too many risks,” the ARC said, explaining its member firms voted ‘No’ to the checklist idea.

The vote was held at an ARC meeting with officials from the Department for Business, Innovation and Skills, who will write the final guidance on the AWR in time for their commencement from October 1st.

The meeting also heard a clarification of the definition of “business in your own account” – a status which, where it applies to an agency worker, “excludes” that individual from the regulations.

The current, draft AWR guidance also states: “Simply putting earnings through a limited company would not in itself put individuals beyond the possible scope of the regulations.”

It adds: “In the event of a dispute, in order to establish if a worker is genuinely self-employed, the courts have devised a number of tests which examine the individual’s circumstances and consider all aspects of the relationship, including what a contract might say or what it does not say, the expectations of the parties and their conduct, to establish the reality of the relationship.

“If the arrangements do not reflect the reality of the relationship (e.g. despite the wording of a contract, the actual reality is that the individual is in not in business on their own account and they work under the supervision and direction of the hirer) or are an avoidance tactic, then individuals are likely to fall into scope of the regulations.”

Tuesday 19th April 2011