Agency Workers Regulations - Agency found a work around?

[Wanderer]

A contractor acquaintance has shown me an email whereby an agency has come up with a wheeze that they think exempts them from the AWR. The contractor isn't bothered about comparing their pay/benefits/facilities with the permies on site and is more amused by it than anything. My own contract is clearly outside the AWR for a number of reasons so I've not seen anything like this:

we have been notified by The Client Ltd that the company for which you are contracted to provide services, trades as a separate legal entity, The Client IT Services Ltd with no permanent employees. Accordingly, the introduction of the Regulations will have minimal impact on you and there will be no increase in pay rate and no additional benefits or facilities available.

The client is fairly large, it's certainly likely that there are multiple companies in the group and the agency is one of the major ones too. I'm told that the contract is (of course) between the contractor and the agency though the client mentioned in the contract is The Client Ltd not The Client IT Services Limited that the agency talks about. It's likely that the separate legal entity does exist and it's likely that the Agency is contracted to that entity.

Have the agency/client found a work around to the AWR or are they deluding themselves (or even acting unlawfully)?
Would it be an IR35 defence to say that as a contractor you were working for a legal entity that had no employees?
Or would it be seen as just another intermediary and that the final client was in fact a fairly large employer?

What do the panel think?

[LisaContractorUmbrella]

A contractor acquaintance has shown me an email whereby an agency has come up with a wheeze that they think exempts them from the AWR. The contractor isn't bothered about comparing their pay/benefits/facilities with the permies on site and is more amused by it than anything. My own contract is clearly outside the AWR for a number of reasons so I've not seen anything like this:



The client is fairly large, it's certainly likely that there are multiple companies in the group and the agency is one of the major ones too. I'm told that the contract is (of course) between the contractor and the agency though the client mentioned in the contract is The Client Ltd not The Client IT Services Limited that the agency talks about. It's likely that the separate legal entity does exist and it's likely that the Agency is contracted to that entity.

Have the agency/client found a work around to the AWR or are they deluding themselves (or even acting unlawfully)?
Would it be an IR35 defence to say that as a contractor you were working for a legal entity that had no employees?
Or would it be seen as just another intermediary and that the final client was in fact a fairly large employer?

What do the panel think?

One of the examples within the legislation guidance cites a company moving an individual between the companies in its group to avoid the 12 week qualifying period - the motivation would be considered to be to deprive the worker of equal treatment and therefore attempted avoidance. IMHO this is the same ballpark and the agency and client could end up with £5000 penalty per infringement i.e. each individual.

[LottoPlayer]

One of the examples within the legislation guidance cites a company moving an individual between the companies in its group to avoid the 12 week qualifying period - the motivation would be considered to be to deprive the worker of equal treatment and therefore attempted avoidance. IMHO this is the same ballpark and the agency and client could end up with £5000 penalty per infringement i.e. each individual.

Totally agree with you there Lisa. None of OP's original statements regarding the arrangements would mean the contractor isn't an Agency Worker under the legislation. There may however, not be a comparator. Which is a different consideration all together. (Still means the contractor is an agency worker though)

[LisaContractorUmbrella]

Totally agree with you there Lisa. None of OP's original statements regarding the arrangements would mean the contractor isn't an Agency Worker under the legislation. There may however, not be a comparator. Which is a different consideration all together. (Still means the contractor is an agency worker though)

If there is genuinely not a comparator that is one thing - to set up a company with the express and sole intention of ensuring that there can be no comparator is something different entirely.

[malvolio]

If there is genuinely not a comparator that is one thing - to set up a company with the express and sole intention of ensuring that there can be no comparator is something different entirely.

Hence the "Genuinely in business" qualifiers...

[TestMangler]

Hence the "Genuinely in business" qualifiers...

WHS

[LisaContractorUmbrella]

Hence the "Genuinely in business" qualifiers...

Exactly. So you agree that using a Ltd Co with the sole intention of attempting to avoid AWR is wrong and that it should be established beyond doubt that working practises put them outside scope.

[malvolio]

Exactly. So you agree that using a Ltd Co with the sole intention of attempting to avoid AWR is wrong and that it should be established beyond doubt that working practises put them outside scope.

I think using a 16 year old LtdCo with no permanent engagements, a strong web presence and a range of clients with a common theme of delivering all aspects of Service Management, including extended bench time, early contract terminations and expensive last-minute cancellations (one of them by HMRC...) would rather indicate I'm genuinely in business. Why does it need a court case to prove it...

[kwinkal]

AWR Clarification

Hi There,

Let me give some background of my situation. I have been employed by one of agency for a big company. At that time I was new in UK market and they asked me to sign Umbrella company contract. I was contracted for £9/Hr in Jun'2011. Later due to AWR legislation I have been moved to £12.11/Hr from 16th Jan'12.

Now my question is being employed by agency through umbrella company I have been getting holiday pay from my normal agency pay (£12.11/Hr). Also I have to pay Employer NI also from this pay rate. Where as other temps in same company have been paid directly from Agency (other than mine) and they have been getting Holiday Pay and they don't have to pay Employer NI from their pay rate (same £12.11). I have calculated and found that I have lost around £6000 against same level of other Temp in same company.

Is this against the rule of AWR? If yes, on what ground? Please somebody help me.

Thanks
Kwinkal

[cojak]

This has nothing to do with AWR and everything to do with working through an umbrella.

I would suggest that you look through the Umbrella section of the website, you'll get more information on your situation there.