AWR Background and Principles
- The main principle of the legislation that Umbrella Companies and Employment Businesses will have to deal with is that Agency Workers, who have worked with a hirer in the same or similar role for 12 weeks or more, must be given equal treatment in terms of basic working and employment conditions of comparable directly recruited employees/workers of the hirer (the "Rights").
- "Pay" is defined as including any sum payable
to the comparable work of the hirer in connection with the worker's
employment including any fee, bonuses or commission which is
directly attributable to the amount or quality of work done by a
worker, holiday pay or other emolument of the employment. However,
occupational benefits such as maternity/paternity leave above the
statutory minimum entitlement, pensions, redundancy payments and
any payment linked to a financial participation scheme such as a
share option scheme are excluded from "pay". Bonuses or incentive
payments given to encourage a worker's loyalty or to reward a
worker's long term service are also excluded.
- In addition to "pay" relevant terms and conditions
which also need to be equalised include terms relating to:
duration of working time, night work, rest periods, rest breaks and
annual leave.
- The responsibility and any resulting liability for ensuring equal treatment potentially falls on all those involved in the supply chain, i.e. The Client, The Employment Business and The Umbrella Company. Temporary Work Agencies (which includes both umbrella companies and recruitment agencies) and Hirers will be liable "to the extent that" they are responsible for breaching the Regulations.
- Not every worker will be inside the scope of the
AWR.
- It is possible for workers to fall outside of the scope of the
Regulations for the purposes of "equal pay rights" if they are
employed in accordance with the provisions of the Swedish
Derogation.
- Complying with the AWR is likely to have a cost implication for all those involved in the supply chain. The cost of meeting equal pay requirements or complying with Swedish Derogation will have to be factored into charge rates, and Umbrella Companies are already incurring a significant cost in terms of additional administration and management of contracts.
