Businesses need to get set to deal with new regulations controlling temp workers, with an estimated implementation cost of £1.8 billion per annum for UK companies.
The Agency Workers Regulations 2010 will come into force on 1st October 2011 and businesses must comply but a complete review of their practices could help control the increased costs that will follow.
After 1st October any workers supplied by a temp agency who have worked for 12 weeks with the same company, will become entitled to the same rights and benefits as workers hired directly by the company.
This means that they will be entitled to the same wages or salary, the same overtime payments and annual pay increases and the same holidays and rest breaks as permanent workers of a similar grade hired directly by the company. Also, temps will be entitled to certain benefits, such as use of the canteen and creche from day one, although the agency workers will not be entitled to join the company's pension scheme or to redundancy payments.
In some sectors, agency workers are temporary workers who are called in to provide holiday or sickness cover for a few days, but in other sectors agency workers are used extensively to provide a flexible work force and the word 'temp' in this context is a misnomer. Companies in these sectors will need to review their policies and either change the way they meet their staffing needs or bite the bullet and be ready to absorb increased costs, and it's a Government estimate that these could be as high as £1.8 billion per year for UK business.
Said Sally Dean, employment expert with Ward Gethin solicitors: "Employers will need to act fast if they have not yet made preparations to comply with the regulations. They must look at their employee benefits and consider which are covered by the regulations and which are excluded. If they rely on agency workers to a substantial extent they must look at how they comply and what the cost of compliance will be.
She added: "With planning, there are ways that companies can take charge of the situation. For example, they could decide to change what is offered to permanent employees, or they could consider whether it is feasible to change their policy and use workers who are genuinely self-employed instead of agency workers, which would take them outside the scope of these Regulations.
"What they cannot do is to move agency workers between different jobs or to change their job description every 12 weeks. These are obvious ruses that are prohibited and will attract a fine."
If you require further information on the above issue or any other employment matter, please contact a member of our Employment Law team on 01553 660033.
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