The government has been accused over “playing to the gallery” over plans to dilute incoming Agency Workers Regulations.

The comments come from Tom Hadley, director of policy and professional services at the Recruitment & Employment Confederation (REC), and follows reports in The Daily Telegraph.

The newspaper reports today that the Prime Minister’s office has commissioned its own legal advice on AWR. This has concluded that the impact of the new laws could be moderated, claiming one option suggested is the ‘Armageddon’ tactic of simply refusing to introduce the new laws.

Hadley told Recruiter: “I am pretty sure this is a little bit of playing to the gallery. There would have been more of a notification and discussion. I think it is a bit of window dressing to say the government is looking at this, that and the other.

“The reality is if you did want to substantially change the regulations, you would have to go head to head with the EU, which is what governments are reluctant to do. If they were willing to go that far, that would bide some time.

“The reality is to make a substantial difference, you would have to be prepared to almost pull out of the EU. The politics of that is quite unlikely. I think what today does help our cause for a one-year review of the regulations. I think it does strengthen our hand in that respect.”

Ann Swain, chief executive of the Association of Professional Staffing Companies (APSCo), says: “If the government is to undertake a wider ranging review of the Directive [AWR], however, the issue that is in most need of review is around liability where there is a breach to an agency worker’s rights to equal treatment.

“The government should seek to halt the trend of client organisations including indemnities within their contracts, which pass liability for any breach under the AWR to the recruitment firm. Liability should be apportioned according to responsibility for a breach, in line with the spirit of the Directive.”

Kevin Barrow, partner at law firm Osborne Clarke, says: “The allegation made is that Vince Cable’s Department of Business Innovation and Skills (BIS) has gold-plated the AWR – ie. the UK Regulations are harsher than is needed.

“The only example given in The Telegraph article is that people who set up their own companies (which we assume to be a reference to those agency workers who trade as personal service company – PSC – contractors) should be subject to a blanket exemption. This was debated at length by us and others at the lobbying stage. It is not a new suggestion.

“BIS decided, however, that it could not exempt PSCs on a blanket basis. This decision may have been because BIS (and the unions) felt that in some cases PSC contractors are in fact not really in business on their own account and there would be a rush towards incorporation of people who really worked under supervision etc.

“HM Treasury might also object … to any AWR exemption which effectively pushed workers into a contracting model, taking them out of the PAYE regime (and reducing the amount of tax and NICs they paid).”

Recruitercontacted the Prime Minister’s office but did not receive a response at time of press deadlines.