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AWR - 6 months on

25.04.12

It has now been six months since the Agency Worker Regulations (AWR) came into place, the controversial legislation that many believe could have a major negative effect on the freelance and contractor community. So far, however, AWR has had very little effect and contractors are still in high demand. But is this set to change?

First proposed in 2002 by the EU as the 'Temporary and Agency Workers Directive', several governments, including that of Great Britain, blocked the legislation from being passed. However, in October 2010, the regulations were finally implemented across the UK.

AWR was launched the following year in October 2011 and created uncertainty amongst both the recruitment companies and those who worked independently. The basic philosophy behind the introduction of these regulations was to give contractors the same employment conditions as the permanent employees of an end client.

Some of these benefits – including equal pay and working conditions – only become available to a contractor after 12 weeks working for the client. From a contractor's first day, however, they are entitled to access employee facilities, such as the staff car park and canteen and they are also entitled to be informed of any suitable vacancies at the company.

AWR has several potential downsides. Although from the outside it seems beneficial for the self-employed, it may well prove to be a hindrance in the future. Yes, the regulations can improve hourly rates, but contractors are generally paid more than regular employees as it is – meaning this 'benefit' doesn't apply to the majority. For those who aren't paid as much as the average employee, an employer who previously used contractors to cut costs may refrain from using them in the future.

Just six weeks after AWR was introduced, there were already shouts to review its terms. The Confederation of British Industry was one organisation which voiced its concerns, along with hundreds of contractors who argued that AWR was not flexible enough. For agencies and end clients alike, administration costs have increased, which was one of the most criticised parts of the legislation.

There are many risks to this particular legislation, and although the contracting community seems to have survived almost unscathed thus far, there is a risk of AWR having a delayed effect on the self-employed.

Being a sole trader through Consort, you will not have to worry about AWR. Our services are provided under a business to business contract for services, individual contractors are in turn in business on their own account as self-employed traders.

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