Jonathan Lindon, founding director of recruiters Source, sheds light on the Agency Workers Regulations about to change our business
The EU is about to poke its nose in our business. Again. If you employ freelancers, or freelance yourself, keep reading, because new legislation is coming that could have a significant impact on creative people, businesses and recruiters by affording temporary agency workers equal rights to permanent staff.
The creative industries rely heavily on freelance talent to meet unexpected demand, cover for absences and in these tough times, simply to remain competitive and flexible. Source, which specialises in recruiting creative communications people, filled 646 freelance positions in May alone, and this figure continues to rise. Across the whole industry, the new Agency Workers Regulations (AWR) coming into force on October 1st will affect at least half and possibly all 25,000 freelancers and every agency out there.
Like the troublesome TUPE Regulations before them, the AWR will have a unique application to the UK creative industry, albeit in a way that was probably unintended and certainly difficult to implement. And here’s the rub; even if the new legislation is not fit for purpose, employers and recruiters still need to understand it, assess its potential effect and develop plans to minimise the costs and disruption of implementation.
TUPE aimed to protect workers from losing their jobs if a contract moved from one company to another. Applied to our industry, this means that if a client moves its account, they are supposed to take the incumbent agency’s staff with them and the new agency is supposed to hire them. Clearly, this is nonsense.
Now the EU is back with another corker. The AWR are designed to give temporary agency workers – i.e. freelancers - equal treatment. This means ensuring parity in pay and employment conditions, but also giving them better access to training, permanent jobs and on-site facilities as if they were permanent staff.
Under certain circumstances, freelancers could become better off than full-time staff, begging two questions: how will the industry manage freelancers’ new rights to ensure it conforms to regulations? And could there be a backlash from permanent staff? Will everyone now be entitled to more?
From day one of an assignment, freelancers will now need to be:
- informed about relevant job vacancies within the hirer’s organisation
- granted access to collective facilities and amenities, including canteens and childcare services
It remains to be seen where the line will be drawn between amenities and employment benefits such as season ticket loans, childcare vouchers, even car parking spaces, which could also be included.
After 12 weeks in the same role, freelancers will be entitled to the same basic working and employment conditions as comparable permanent staff or directly recruited workers. These include:
- pay, including fees, commissions, bonuses, overtime and any other payments directly attributable to the amount or quality of the work undertaken by them
- working hours and breaks, including time off for antenatal appointments
- annual leave, including over and above the statutory minimum, when the freelancer can choose to either take the leave or receive additional pay
- appraisals and training
Given that freelancers generally earn more than permanent staff, the access to new levels of pay and benefits may now tip the scales too far in their favour. In granting agency workers more rights, the EU is now facing employers with the prospect of not only increased costs, but legal challenges from freelancers and permanent staff alike, if they feel their rights have been violated.
Employers, who think there are ways round the Regulations by employing freelancers directly or terminating and re-employing them before the 12 week period is completed, should proceed with caution.
Firstly, agency workers cannot claim unfair dismissal, redundancy pay, request maternity or paternity leave. Employing workers directly, even on zero-hour contracts, means they may qualify for those additional rights. Secondly, a minimum break of more than six weeks between assignments will be required to avoid the 12 week rule.
So, we’re stuck with it. Recruiters will need to share the responsibility of implementation with clients, but the truth is we won’t know the true scale of the impact for some time as any necessary changes are made and legal precedents are established.
In the mean time, our advice is: don’t take any risks and be prepared.