AWR and Agency/Umbrella Relationships

[eatenrifles]

I'm trying to explain to some colleagues how the No Rights Employee status comes about with regard to working through an agency on their PAYE if you're forced to by inside blanketing or PSC bans.

Their thinking is:

Scenario 1: You go on the agency payroll, You're an employee of the agency, but they supply you to the client. You're classed as an agency worker and AWR apply after 12 weeks?

Scenario 2: You go on the umbrella payroll, you're an employee of the umbrella, but the agency supplies you to the client. You're classed as an agency worker and AWR apply after 12 weeks?

I'm sure the above is wrong and you just get zero rights, but can anyone explain simply why you don't get any?

From government guidance my colleagues are assuming what was once a contractor will now be an agency worker so they should get employment rights from the client. I'm thinking it's more akin to a zero hours contract.

[northernladuk]

Why are you explaining the situation when you don't know?

Maybe do some reading up?

Agency Workers Regulations (AWR) - What you need to know

Agency Workers Regulations - Are You In Scope? | Crunch

https://www.contractorumbrella.com/r...gulations-awr/

The last article mentions...

What if I suspect I am not being afforded my rights under the AWR?
If you believe you’re not being treated fairly and comparably to analogous permanent staff, you can make a written request for information to the agency which engages you. If the agency does not do so within four weeks, you may then make a request directly to the hirer.

Although it is punishable by law to fail to comply with these requests, a failure to respond is looked upon very unfavourably by employment tribunals if proceedings reach that stage.

So maybe get them to do that rather than advise them on something you don't know about?

[eatenrifles]

Why are you explaining the situation when you don't know?

Bad phrasing. We're having a discussion, they're convinced they're going to get employee rights, I'm not so sure.

[GhostofTarbera]

Bad phrasing. We're having a discussion, they're convinced they're going to get employee rights, I'm not so sure.

How could an umbrella afford employee rights out of the £70 month they get each month from your rate - lucky if they make a tenner per person after costs




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[northernladuk]

Bad phrasing. We're having a discussion, they're convinced they're going to get employee rights, I'm not so sure.

And as mentioned above there is a process to challenge this within the legislation so I'd say best bet is to use it so there is no doubt.

[eatenrifles]

How could an umbrella afford employee rights out of the £70 month they get each month from your rate - lucky if they make a tenner per person after costs

Their expectation is the client will be obliged to offer employment rights after 12 weeks per the AWR. Not sure if adding an umbrella to the mix changes the approach.

None of the post-April 6th contracts, T&C's etc. for those who are currently Ltd. Co. contractors have been revealed, so it's an unknown at the moment.

[GhostofTarbera]

Their expectation is the client will be obliged to offer employment rights after 12 weeks per the AWR. Not sure if adding an umbrella to the mix changes the approach.

None of the post-April 6th contracts, T&C's etc. for those who are currently Ltd. Co. contractors have been revealed, so it's an unknown at the moment.

Your employer is the umbrella not the end client

95% of clients are banning ltd company’s the other 5% soon will when they realise the risk


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[DolanContractorGroup]

I'm trying to explain to some colleagues how the No Rights Employee status comes about with regard to working through an agency on their PAYE if you're forced to by inside blanketing or PSC bans.

Their thinking is:

Scenario 1: You go on the agency payroll, You're an employee of the agency, but they supply you to the client. You're classed as an agency worker and AWR apply after 12 weeks?

Scenario 2: You go on the umbrella payroll, you're an employee of the umbrella, but the agency supplies you to the client. You're classed as an agency worker and AWR apply after 12 weeks?

I'm sure the above is wrong and you just get zero rights, but can anyone explain simply why you don't get any?

From government guidance my colleagues are assuming what was once a contractor will now be an agency worker so they should get employment rights from the client. I'm thinking it's more akin to a zero hours contract.

Hi

AWR will apply to inside-IR35 contractors, even if they're PSCs.

The guidance states:

The definition of an agency worker excludes those who are in a "profession or business undertaking carried out by the individual" where the hirer is a client of customer of the individual (i.e. a genuine business to business relationship). A profession is normally someone who is certified by a professional body such as a doctor or lawyer. Normally a professional or a person in business providing services to a client or customer is not working under that person's supervision or direction. But it is still possible for someone in a profession or in a business to be an agency worker if there is no such client or customer relationship.

Simply putting earnings through a limited company would not in itself put individuals beyond the possible scope of the Regulations.

Individuals may choose to do this for the sake of flexibility or for tax reasons. However, where the relationship between the individual, TWA and hirer remains, in essence, a tripartite relationship, and a hirer is not a client or customer of such individuals, they are likely to be in scope.

So, if you're not considered a genuine business, AWR applies.

BIS AWR Guidance

I should also mention that there's no such thing as a 'No Rights Employee'.

How could an umbrella afford employee rights out of the £70 month they get each month from your rate - lucky if they make a tenner per person after costs


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We, along with all other compliant umbrella's, pay things like SSP.

Their expectation is the client will be obliged to offer employment rights after 12 weeks per the AWR. Not sure if adding an umbrella to the mix changes the approach.

None of the post-April 6th contracts, T&C's etc. for those who are currently Ltd. Co. contractors have been revealed, so it's an unknown at the moment.

The client is under no obligation to offer employment rights, and I would doubt any client will. They could engage the contractors directly under contracts of employment which would lead to employment rights.


Thanks

Zeeshan

[eek]

Oh goodie - Agency Worker Rights have appeared again

Anyone wish to scare the client they are currently working for?

If so I will begin.

AWR require the following:-

– If you are an ‘agency worker’ you have a right after 12 weeks service with a client to equal pay and equal working hours, rest breaks and holiday provisions, and the right to paid time off for ante-natal appointments, that a ‘comparable’ permanent employee of your client receives (full details in Appendix 2)

Now equal pay should (in theory) work both ways so what happens when the permanent member of staff asks why the inside IR35 contractor over there is bring paid 3 times as much money.

It's not something that has really mattered until now but Unions are rubbing their hands with glee...

[DolanContractorGroup]

Oh goodie - Agency Worker Rights have appeared again

Anyone wish to scare the client they are currently working for?

If so I will begin.

AWR require the following:-


Now equal pay should (in theory) work both ways so what happens when the permanent member of staff asks why the inside IR35 contractor over there is bring paid 3 times as much money.

It's not something that has really mattered until now but Unions are rubbing their hands with glee...

I don't believe that AWR will be much of an issue for clients/agencies in light of the IR35 reforms. The rates of pay for inside-IR35 contractors are still above most permanent comparators from what I'm seeing.

Thanks

Zeeshan